Commercial rent arrears recovery (CRAR)
Commercial rent arrears recovery (CRAR)

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Commercial rent arrears recovery (CRAR)
  • Right to recover rent
  • Leases and premises
  • Rent recoverable
  • Recovery from sub-tenant
  • Who can exercise CRAR?
  • Enforcement agents
  • Notice to the tenant
  • Entry on the premises
  • The goods that can be taken
  • more

Right to recover rent

The commercial rent arrears recovery (CRAR) regime allows landlords to seize a tenant’s goods from the demised premises in order to recover unpaid rent. It replaced the old common law right to levy distress, and is more strictly regulated than the old regime in that (among other things) it requires the use of enforcement agents and tenants must be given notice in advance.Tribunals, Courts and Enforcement Act 2007, s 72

CRAR also allows landlords to recover rent from sub-tenants, by serving notice requiring them to pay rent direct to the landlord, rather than the tenant (replacing the notice which could previously be served on a sub-tenant, pursuant to the Law of Distress Amendment Act 1908). See Recovery from sub-tenant below.TCEA 2007, s 81

Exercising CRAR will waive any right to forfeit the lease that may have arisen. Landlords should therefore first consider whether they wish to forfeit before taking any steps to exercise CRAR (see Practice Note: Forfeiture of a lease).Thirunavukkrasu v Brar [2018] EWHC 2461 (Ch)

Leases and premises

CRAR can only be used to recover rent in relation to leases of commercial premises.TCEA 2007, s 75

It cannot be used to recover rent in relation to mixed use premises or residential premises. This includes premises:

  1. where the lease (or any sublease) allows residential use, even if they are not actually in use as a residential dwelling, or

  2. that the tenant is occupying as a dwelling, unless this is prohibited by the leaseTCEA 2007, s 75(5)

A lease means a tenancy in law or in equity, including a tenancy at will, but