BAILIFF Services /  COMMERCIAL RENT ARREARS RECOVERY / CRAR

Using bailiffs to collect commercial tenants outstanding rent?

Commercial Rent Arrears Recovery


Our Certificated Enforcement Agents (Bailiffs) will attend your rental property and collect your commercial tenants outstanding rent arrears - usually at no cost to the landlord*


Commercial Rent Arrears Recovery is regulated under Section 72 of the Tribunal Courts and Enforcement Act 2007 and the Taking Control of Goods Regulations 2014
Commercial Rent Arrears Recovery

How do I use bailiffs to collect commercial rent arrears?



Collecting commercial rent can be a challenging aspect of property management, but with UK Bailiffs, you can navigate this process efficiently. Here’s how you can use our services to recover overdue rent:


Understand CRAR: Commercial Rent Arrears Recovery (CRAR) is a statutory procedure that allows landlords of commercial premises to recover rent arrears without going to court. This process is court-free, meaning you can act quickly once you've met the necessary criteria.



Criteria for CRAR:


  • Purely Commercial: The property must be used solely for commercial purposes.
  • Written Lease: There must be a written lease or tenancy agreement in place.
  • Arrears: The rent must be at least seven days in arrears.
  • Goods on Premises: The tenant must have goods on the premises worth at least the value of the arrears.

Instruct UK Bailiffs: Contact us to start the CRAR process. We require details such as the tenant's name, the property address, and the amount of rent owed.

 

Notice of Enforcement: Our enforcement agents (bailiffs) will serve a Notice of Enforcement to your tenant, giving them seven clear days to settle the outstanding rent before any further action is taken. This notice ensures the tenant is aware of the impending action.


Taking Control of Goods: If the tenant does not pay within the notice period, our certificated enforcement agents will visit the premises. They can then take control of goods to secure payment or enter into a Controlled Goods Agreement where the tenant agrees to a payment plan with goods held as security.


Sale of Goods: If payment is still not made, goods can be removed, stored, and eventually sold at auction to recover the rent arrears plus any enforcement fees. Note, only goods on the leased premises can be taken into control.


Fees and Costs:

  • The costs associated with CRAR are typically covered by the tenant, not the landlord. The fees are regulated and set by the Ministry of Justice, ensuring transparency and fairness.


Lease Forfeiture Consideration:


  • If you believe the tenant has no valuable goods or there's little chance of recovering the rent, consider lease forfeiture as an alternative. However, using CRAR implies an intent to continue the lease, so you cannot pursue both CRAR and forfeiture simultaneously for the same arrears period.


Why UK Bailiffs?:


  • Certificated Agents: All our enforcement agents are certificated, ensuring they have the legal authority and training to perform these duties.
  • Experience: With years of experience in commercial rent recovery, we understand the nuances of the law and tenant behavior.
  • Efficiency: We aim to resolve your rent arrears quickly, often at no direct cost to you as the landlord.


By choosing UK Bailiffs, you ensure that your commercial rent arrears are dealt with professionally and legally, allowing you to maintain or regain control over your property's financial management. Contact us to discuss your specific situation and how we can help you recover what you're owed.


Commercial Rent Arrears Recovery (CRAR)  is a statutory process in the United Kingdom that allows landlords to recover unpaid rent from commercial tenants. It enables landlords to instruct enforcement agents to seize goods from the tenant's premises to recover the debt. UK Bailiffs provides a professional and efficient CRAR service, ensuring landlords can recover outstanding rent while complying with legal requirements.


Introduced under the Tribunals, Courts and Enforcement Act 2007, CRAR replaced the ancient common law remedy of "distress for rent." It allows landlords of commercial properties to take control of a tenant's goods without going to court, provided certain conditions are met. CRAR is a non-court procedure, making it a quick and cost-effective solution for landlords dealing with rent arrears.

Our CRAR Process


  1. Instruct us online - our online form takes a few minutes to complete and generates an automated Warrant.
  2. Initial Assessment: UK Bailiffs conducts a review of the lease agreement and outstanding rent to confirm eligibility for CRAR.
  3. Notice of Enforcement: A 7-day Notice of Enforcement is issued to the tenant, giving them an opportunity to pay the arrears before enforcement action is taken.
  4. Enforcement Action: If the tenant does not settle the arrears, UK Bailiffs' enforcement agents attend the premises to take control of goods, in accordance with the regulations set out in the Taking Control of Goods (Fees) Regulations 2014.
  5. Sale of Goods: If payment is not made, the seized goods may be sold at auction to recover the debt.
  6. Detailed Reporting: Full documentation and photographic evidence are provided throughout the process to ensure transparency and compliance.

Advantages of Using CRAR


No Court Involvement: CRAR is a non-court procedure, making it faster and less costly than litigation.

Efficient Debt Recovery: Provides landlords with a streamlined method for recovering rent arrears.

Legal Compliance: Ensures all actions are taken in accordance with UK legislation, minimizing the risk of legal disputes.


Legislation Governing CRAR


Tribunals, Courts and Enforcement Act 2007: Establishes the legal framework for CRAR, replacing common law distress for rent.

Taking Control of Goods Regulations 2013: Outlines the procedures for enforcement agents when taking control of goods.

Taking Control of Goods (Fees) Regulations 2014: Specifies the fee structure for enforcement actions.

CRAR Legal team

VAT on CRAR Enforcement Fees - What You Need to Know


Recent changes by HMRC and HCEOA regarding VAT on Commercial Rent Arrears Recovery (CRAR) enforcement fees:

  • For Non-VAT Registered Landlords:
  • The tenant (debtor) will be responsible for the VAT on top of the enforcement fees. (For Example) If the enforcement fee is £310, the tenant would pay £372, with £62 being VAT.
  • For VAT Registered Landlords:
  • The tenant will pay the (example) enforcement fee of £310 directly to us. On receipt of this payment, UK Bailiffs will issue you an invoice for the £62 VAT. Once you pay this VAT to us, you will be able to reclaim this amount from HMRC.


INSTRUCTION FORM


Completing the form does not constitute a contract or acceptance of the instruction.

Once submitted, we will email you a copy of the Warrant for acceptance and then we will begin the process. We may also request further details as part of our due diligence procedures. If you have any questions in relation to the instructions, please email us HERE or phone 03301331818


What is CRAR?

Commercial Rent Arrears Recovery (CRAR) is a powerful tool for landlords to recover unpaid rent from commercial tenants. Introduced on April 6, 2014, CRAR replaced the ancient common law right of distress. Through this process, landlords can instruct an enforcement agent (bailiff) to seize and, if necessary, sell a tenant’s goods to recover the owed rent. This procedure requires serving legal notices on the tenant.


Defining the Landlord

Under CRAR, a landlord is “the person entitled to the immediate reversion in the property comprised in the lease.” This means any landlord whose immediate tenant has defaulted on rent can exercise CRAR.


Applicability of CRAR

CRAR applies to all written commercial tenancies, whether legal or equitable, including tenancies at will. It excludes licences to occupy and tenancies at sufferance (where a tenant remains in occupation after the lease expires without the landlord’s consent). Importantly, invoking CRAR waives any right to forfeit the lease for that rental period.


Mixed-Use Premises

CRAR applies only to leases where the premises are used for commercial purposes. However, if a residential occupation breaches the lease terms, CRAR remains applicable. This prevents commercial tenants from avoiding CRAR by allowing residential use of part of the premises.


Recoverable Rent Under CRAR

Under CRAR, "rent" is defined as the amount payable for possession and use of the premises, including interest and VAT. It excludes rates, services, repairs, maintenance, or insurance, even if termed as rent in the lease. For inclusive rents, only the portion attributable to possession and use is recoverable.


Conditions for Exercising CRAR

Before CRAR can be exercised, the following conditions must be met:

  1. The tenant must be in arrears before the Notice of Enforcement is issued.
  2. The arrears amount must be certain or calculable.
  3. The “net unpaid rent” must equal or exceed seven days' rent.
  4. The tenant must remain in arrears when goods are seized.
  5. The enforcement agent must give seven clear days' notice.


Authorising CRAR

Landlords must authorise an enforcement agent in writing, providing detailed information including:

  • Date of authorization
  • Landlord’s name and contact details
  • Details of the authorized agent
  • Identification of the commercial premises
  • Amount of rent owed
  • Period for which the rent is due


CRAR After Lease Termination

CRAR can only be applied if goods were seized before the lease ended or if rent was due and payable before the lease termination, meeting specific conditions:

  1. The lease did not end by forfeiture.
  2. No more than six months have passed since the lease ended.
  3. The rent was due at lease end.
  4. The tenant remains in possession of part of the premises.
  5. Any new lease is a commercial lease.
  6. The landlord retains the immediate reversion.


Recovering Rent from an Under-Tenant

Landlords can direct an under-tenant to pay rent directly to them instead of the immediate tenant through a Section 81 Notice. This occurs when a tenant sub-leases the premises and defaults on rent. The notice compels the subtenant to pay their rent to the superior landlord until the arrears are settled. Failure to comply allows the superior landlord to exercise CRAR and other remedies against the under-tenant.

The Section 81 Notice must include:

  • Landlord’s details and date of notice
  • Amount of recoverable rent
  • Confirmation of direct payment requirement until arrears are settled
  • Withdrawal rights under paragraph 55 of the regulations

Should the under-tenant fail to pay, they become an immediate tenant for enforcement purposes, enabling CRAR and other recovery methods.


CRAR is a robust framework for landlords to recover commercial rent arrears, ensuring clear processes and legal protections for both landlords and tenants.

Questions and Answers?

  • What is CRAR

    Commercial Rent Arrears Recovery replaced Common Law Distress for Rent in April 2014.


    CRAR is a self help remedy and as such does not require leave from the Court. 


    A landlord can instruct enforcement agents (formerly known as bailiffs) to collect the rent or take control of goods.

  • Do I need a Court Order to instruct bailiffs to collect rent??

    No.  CRAR is a self help remedy and as such does not require leave from the Court. 

  • Under what circumstances can CRAR be used?

    CRAR may only be used on commercial premises and there must be a written lease in place. (If the premises are mixed use or residential use, you will need to obtain a judgment to recover arrears)


    CRAR may only be used to recover rent, interest and VAT. ( If you need to recover other charges such as insurance or service charges, we can help separately).


    The rent must be at least seven days in arrears and the rent owed must be for the value of at least 7 days’ rent.


    The Enforcement Agent (Bailiff) must give the tenant at least 7 days’ notice (excluding Sundays and bank holidays) that he is exercising his right to use CRAR. 


    The rent must still be unpaid at the time the notice is served, as well as immediately before any goods are seized.


    The notice must be served, either by post, hand, fax and electronic communications such as email. Notice will be valid for 12 months.

  • What does Taking Control of Goods mean?

    A Certificated agent will attend your tenants property and take control (seize) of internal and external assets.



    If payment is not received then these goods can be sold at auction to recover money.

  • Are you required to give the tenant notice?

    Previous regulations (Distress for Rent) provided the element of surprise. With no prior notice, the bailiff could turn up and seize your tenants goods. 


    By contrast, under the new regulations of CRAR, we must give the tenant at least 7 clear days notice in writing.


    We will usually send the letter out on the next working day after we have received your instruction.

  • Can anyone take Control of Goods?

    Regulations state that only a Certificate Enforcement Agent may take Control of Goods.


    All of our Agents are Certificated and experienced in collecting Commercial rent arrears.

  • Can I forfeit the lease if you are unsuccessful?

    Not in that quarter/ rent period..  


    By exercising CRAR you are effectively agreeing continuation of lease. 

  • When will I get my money?

    All cleared funds less fees will be paid into your nominated bank witthin 2 working days.

  • Do you set your own fees?

    All fees are set by the Ministry of Justice  and are passed on to your tenant.

Contact A Recovery Specialist

Commercial Rent Arrears Recovery (CRAR) Section 73 Tribunal Courts and Enforcement Act 2007