Commercial Rent Arrears Recovery ("CRAR")

CRAR comes into force on 6th April 2014.   Until then, the common law remedy of distress should be exercised. Distress is replaced by CRAR in relation to recovery of rent arrears for commercial property. CRAR allows a Landlord to instruct an Enforcement Agent to take control of a tenant's goods and sell them in order to recover an equivalent value to the rent arrears.   CRAR requires various notices to be served on the tenant. Whilst the forms of notices are not prescribed, the notices must contain certain information. If the tenancy is unwritten, CRAR cannot be exercised. CRAR only applies to tenancies and will not be available to a Licensor for recovery of non-payment of a licence fee. CRAR can only be exercised at the premises demised by the Lease. For the purpose of CRAR rent is the amount payable for rent including interest and VAT.   Rent does not include any sum in respect of rates, council tax, services, repairs, maintenance, insurance or other ancillary matters even if these amounts are reserved as rent in the Lease. CRAR can only be used if certain conditions are satisfied including a minimum amount of rent. It is important that proper notices are served and that the Landlord obtains proper advice before exercising his rights to remove goods at the tenant's premises. For further information, please contact Elizabeth Shaw at elizabeth.shaw@wake-smith.com or call her on 0114266 6660.

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