The End of Distress for Commercial Rent is Nigh

Posted: Tuesday, 17 September 2013 @ 16:12

Back in March I did a blog on the end of distress and the introduction of a new system of commercial rent recovery.

We now know that the new system will come into force on 6 April 2014. Regulations have been made and commercial landlords and tenants, and commercial  bailiffs, will need to brush up on the new system which sweeps away ancient common law rights, which some rightly regarded as draconian. The playing field has been levelled. The balance of power has been redressed.

For the full detail see my previous blog by clicking here.

We now know that the minimum rent due for CRAR to apply is 7 days' unpaid rent, and the minimum period of notice in writing is 7 days.

The other main points to note are:

1.The law of distress is abolished. It will only be possible to seize goods through the new CRAR procedure.

2. If the lease includes residential property, the landlord will not be able to use the procedure.

3. CRAR will not be available for verbal tenancies-there must be a written agreement in place. CRAR is available for tenancies at will but not for a tenancy at sufferance or occupation under a mere licence.

4. CRAR is only available for the recovery of rent, the payment for occupation. It does not include service or other charges, even if they are defined as rent in the lease.

5. The landlord will have to give the tenant a written notice in the prescribed form calculating the rent which has fallen due and is unpaid, any interest payable, and any VAT applicable.

6. Once the written notice has been served by the landlord, the tenant has the option of applying to the court, and the court will have the power to set aside the notice or delay its execution.

7. Only authorised enforcement agents will be able to seize goods when the CRAR notice has expired.

8. The way in which enforcement takes place is specified in the new CRAR procedure. For example, control of the goods can take place any day of the week between 6 am and 9 pm, but can take place at other times if the business is open for trade.

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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