CRAR-an update on the new regulations

Posted: Wednesday, 5 February 2014 @ 12:05

On 6 April2014 there will be a new dawn for commercial rent recovery. The new regulations abolishing the ancient law of distress come into force on that date. For details see my blogs of 3 March 2013 click here and 17 September 2013 click here.

It will no longer be possible to send in the Baliffs without notice to distrain on goods to recover rent and other arrears under a commercial tenancy.

All the required regulations are being put into place. The second of 3 sets were made last month. The Taking Control of Goods (Fees) Regulations 2014 set out the fees payable by the debtor to the enforcement agent at each stage of the new process.  

The fees payable by the tenant debtor depend on whether the enforcement is under a High Court Writ.

If it is not under a High Court Writ the fees are:

  1. Compliance stage - a fixed fee of £75
  2. Enforcement stage - a fixed fee of £235 and 7.5% of the sum recovered exceeding £1500
  3. Sale or disposal stage - a fixed fee of £110 and 7.5% of the sum recovered exceeding £1500

If it is under a High Court Writ the fees are:

  1. Compliance stage - a fixed fee of £75
  2. First enforcement stage - a fixed fee of £190 and 7.5% of the sum recovered exceeding £1000
  3. Second enforcement stage - a fixed fee of £495
  4. Sale or disposal stage - a fixed fee of £525 and 7.5% of the sum recovered exceeding £1000

The compliance stage is all activities realting to enforcement from the receipt of the enforcement agents of instructions. The enforcement stage is all activities relating to enforcement from the first attendance at the premises, but not including the commencement of sale or disposal stage. The sale or disposal stage begins on the first attendance at the property for transporting goods or preparation of sale on the premises.

For High Court Writs there are 2 stages for enforcement. If the enforcement agent and debtor enter into a controlled goods agreement, the first enforcement stage applies. If there is no such agreement, or it is breached, the second enforcement stage kicks in.

In addition the enforcement agent can recover "disbursements" These are the expenses reasonably and actually incurred for storing goods, hiring a locksmith to gain access to premises when using reasonable force to enter them, and court fees incurred by the enforcement agent applying to court in relation to enfocement powers. Also recoverable are the auctioneers expenses incurred in any sale such as commission, out of pocket expenses, and advertisement fees. There is also provision for recovery of commission of 7.5% for internet or other sales.

The last piece of the jigsaw will be the regulations covering certification to work as an enforcement agent. These are expected shortly.

Nigel Musgrove
Business and Litigation Solicitor
Tel: 0845 003 5639

Blog by Nigel Musgrove
Nigel has been providing dispute resolution advice as a solicitor for over 35 years. As well as advising SMEs and business owners on disputes he also offers a specialist licensing law service. View profile
Call Nigel on +44 (0)1285 847 001 or by email
This blog is not intended to constitute legal advice, nor is it intended to be a complete and authoritative statement of the law, and what we say might be out of date by the time you read it. You should always seek legal advice to confirm whether or how any information in this article applies to your particular situation. We offer a free telephone consultation to discuss your particular circumstances.

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