The pros and cons of Commercial Rent Arrears Recovery (CRAR)

When a commercial tenant falls behind on rent, landlords often want a remedy that is fast, direct and avoids lengthy court proceedings. Commercial Rent Arrears Recovery (CRAR) offers exactly that. It is a statutory procedure that allows landlords to recover rent arrears by instructing enforcement agents to take control of a tenant’s goods.

Below, we explain how CRAR works, when it can be used, and the key requirements landlords must follow.

What is CRAR?

CRAR is a legal process introduced by the Tribunals, Courts and Enforcement Act 2007. It replaced the old remedy of distress and gives landlords a regulated way to recover pure rent arrears from commercial tenants.

CRAR allows certificated enforcement agents to enter the tenant’s premises, take control of goods, and ultimately sell them to recover the outstanding rent.

When can CRAR be used?

CRAR is only available when:

• The property is commercial premises let under a written lease. The remedy does not apply to residential or mixed use premises
• The arrears relate to rent only (not service charges, insurance, or other sums)
• The landlord has given the tenant the required notice of enforcement
• The tenant is still in possession of the premises (i.e., the lease has not already been forfeited)

The CRAR process

To begin CRAR, landlords must:

1. Serve a Notice of Enforcement. This must give the tenant at least seven clear days’ notice before enforcement agents can attend the premises.
2. Instruct certificated enforcement agents. Only authorised agents can carry out CRAR. Landlords cannot take control of goods themselves.
3. Ensure that Rent is overdue in accordance with the terms of the lease. The landlord will need to check the terms of their lease and consider timing carefully before exercising the procedure.

Advantages of CRAR

CRAR is often attractive because it avoids court proceedings, can be quicker than issuing a Money Claim, provides a clear, regulated process and places pressure on tenants to resolve arrears promptly.

CRAR’s limitations

CRAR is not suitable in every situation. Landlords should bear in mind that it can only recover rent, not other sums; tenants may have limited goods of value, and the notice period gives tenants time to move goods or challenge the process. There is also a risk that exercising CRAR can waive a landlord’s right to forfeit the lease for prior breaches

However, it can be an effective remedy when used strategically. If you’re a commercial landlord and would like advice on whether to use CRAR, you can contact our Dispute Resolution Team. Call us now on 0330 221 8855 or email us at disputeresolution@attwaters.co.uk.