Commercial Rent Arrears Recovery Overview

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Questions and Answers

What is the minimum requirement for the rent to be collected under CRAR?

The rent does not need to be in arrears.

The rent must be less than seven days in arrears.

The rent must be at least one month overdue.

The rent must be at least seven days in arrears. (correct)

Which of the following is NOT eligible for recovery under CRAR?

Interest on rent

Outstanding rent

Service charges (correct)

VAT on rent

What type of properties can CRAR be used for?

Private housing

Residential properties

Commercial premises (correct)

Mixed-use properties

What is the notice period that an Enforcement Agent must provide before using CRAR?

7 days Signup and view all the answers

How can the notice to the tenant be served according to CRAR regulations?

By post, hand, fax, or electronic communication Signup and view all the answers

What was a significant change from the previous regulation (Distress for Rent) to CRAR?

A notice must now be given before seizure. Signup and view all the answers

What is the validity period of the notice served to the tenant under CRAR?

12 months Signup and view all the answers

Which of the following statements is true regarding CRAR?

It is a self-help remedy that does not require court leave. Signup and view all the answers

What method replaced the common law right of distress for recovering rent arrears?

Commercial Rent Arrears Recovery (CRAR) Signup and view all the answers

Which of the following is a requirement for CRAR to be applicable?

The tenancy must be in writing Signup and view all the answers

What does the term 'rent' encompass under CRAR?

Rent, interest, and VAT Signup and view all the answers

Which of the following does NOT fall under the CRAR provisions?

Licences to occupy Signup and view all the answers

What happens if CRAR is exercised in a rental period?

The right to forfeit is waived Signup and view all the answers

Which condition must be satisfied if CRAR is to apply when a lease has ended?

Control of goods must be taken before the lease ends Signup and view all the answers

What is necessary for the landlord to instruct an enforcement agent under CRAR?

Written authorization by the landlord Signup and view all the answers

What type of notice must the landlord serve to the under-tenant under Section 81?

A written notice Signup and view all the answers

What must happen for a superior landlord to recover rent from an under-tenant?

A Section 81 Notice must be served Signup and view all the answers

Which document outlines the terms of CRAR and its implementation?

Tribunals, Courts and Enforcement Act Signup and view all the answers

What constitutes a 'tenancy at sufferance'?

A lease that has ended but tenant stays without consent Signup and view all the answers

What is the minimum period that must pass after serving a Section 81 Notice before the under-tenant must start paying rent to the superior landlord?

14 clear days Signup and view all the answers

Who is the most important member of UK Bailffs?

Shani Signup and view all the answers

Study Notes

Commercial Rent Arrears Recovery (CRAR)

CRAR is regulated under Section 72 of the Tribunal Courts and Enforcement Act 2007 and the Taking Control of Goods Regulations 2014.
Allows landlords to instruct enforcement agents (bailiffs) to recover rent arrears without requiring court approval.
Can only be utilized for commercial premises with a written lease; mixed-use or residential premises require a court judgment for recovery.

Conditions for CRAR Use

Rent must be at least seven days in arrears and must cover a minimum of seven days’ worth of rent.
Enforcement agents must give the tenant a minimum of 7 days' notice before taking action, excluding Sundays and bank holidays.
Notice for CRAR is valid for 12 months and can be served via post, hand, fax, or electronic means.

Process of Enforcement

Certificated agents can take control of tenants' internal and external assets to recover rent arrears.
CRAR, effective from April 6, 2014, replaced the common law right of distress.
Agents must send the notification letter typically the next working day after receiving instructions.

Definition of Landlord and Leases

The landlord is defined as the individual entitled to the immediate reversion of the property under a lease.
CRAR applies to all written tenancies of commercial premises, including legal and equitable tenancies, but excludes licenses to occupy and tenancies at sufferance.

Limitations and Conditions

Using CRAR waives any right to forfeit during the rental period.
Only amounts specified as rent (including interest and VAT) under the lease can be recovered, excluding rates or service charges.

Authorisation Guidelines

Landlords must provide authorization to the enforcement agency, detailing the tenant's information, amount of arrears, and specifics of the commercial premises.

End of Lease Considerations

CRAR is applicable if control of goods occurs before the lease ends; rent must have been due before lease conclusion.
New leases must qualify as leases of commercial premises.

Section 81 Notice for Under-tenants

Superior landlords can issue a Section 81 Notice to sub-tenants, requiring them to pay rent directly to the superior landlord if their immediate landlord has fallen behind on rent.
The under-tenant must comply within 14 days from receiving the notice, which must contain specific information regarding the landlord, arrears, and payment instructions.

Enforcement for Non-payment

Under-tenants become immediate tenants for enforcement purposes once a Section 81 Notice is served.
Standard enforcement methods, including CRAR, are then available against the under-tenant for rent recovery.

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Description

This quiz provides an overview of Commercial Rent Arrears Recovery (CRAR) under the applicable UK laws. It covers the role of certificated enforcement agents and the process of collecting outstanding rent arrears from commercial tenants. Gain insights into the regulations and your rights as a landlord.