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On 6 April this year, Distress for Rent was replaced with Commercial Rent Arrears Recovery, CRAR, as the correct legal process for landlords wishing to recover rent arrears by seizing goods from the tenants. The new CRAR will still allow landlords of commercial premises the right to recover rent arrears through the seizure of goods, although the two systems are very different. The type of goods that may be seized has been reduced and the right may only be exercised after a more protracted procedure.
Perhaps the most significant change is that a landlord now has to give a tenant at least seven clear days’ notice before the landlord’s enforcement agent can attend the premises to exercise CRAR.
These changes are likely to be welcomed by tenants having difficulties keeping up with rent payments. For landlords it will make the recovery of arrears a more time consuming and costly process. They will have to consider the other options available to them, including serving a statutory demand on the tenant, bringing court proceedings to recover the debt or taking steps to forfeit the lease. All of these will normally be more expensive than the remedy of distress would have been. It is more likely that a landlord will seek some other security such as a guarantor or a rent deposit before entering into a tenancy, to try and protect their position.
Elaine Wilcox, Insolvency Consultant
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