New Method Of Enforcement To Come Into Force Next Month
Major changes which will see the introduction of a new commercial rent arrears recovery (CRAR) process relating to arrears on commercial property come into force at the start of next month.
The new measures – which apply from April 6th 2014 – replace the common law right of distress, which can still be used up until that date. Under the procedure, the landlord can instruct an enforcement agent to attend at the premises for which the rent is owed and seize goods, which can be sold to pay off the arrears.
The new process aims to strike a balance between the interests of landlords and tenants and to modernise the procedure.
The proposals include regulations that landlords should give tenants notice a minimum of seven working days before implementing CRAR.
CRAR differs from distress in several ways. It can only be used in respect of pure rent arrears and cannot be used to recover service charge or insurance premium arrears. It also can’t be used in respect of premises that have some residential use.
The switch to CRAR is almost upon us and it is absolutely vital that landlords ensure they understand what these changes mean, as well as how they will affect them when it comes to the issue of rent arrears recovery.
"Landlords owed sums for service charges or in respect of mixed use premises should take action under the current procedure before the new rules come into force.
"Landlords need to be aware that their powers we be more limited following the introduction of CRAR, particularly due to the requirement for advance notice."
Danny Revitt - Partner