Commercial Rent Arrears Recovery (CRAR)
Pure Commercial Rent is collected and enforced by following the rules and regulations as set out in the Commercial Rent Arrears Recovery (CRAR) which is contained within the Tribunals, Courts & Enforcement Act 2007.
The new Act although dated 2007 did not actually come into force until 2014 which was when the new regulations were implemented across the whole of the enforcement industry. On the 6th April 2014, the Common Law remedy or distraint or distress for rent was abolished. It was replaced by CRAR (Commercial Rent Arrears Recovery). At Collect My Debt Ltd (CMD), our internal agents along with enforcement agents have the expertise and knowledge of this regime. Under section 72 schedule 12 (taking control of goods) a commercial landlord can recover rent payable under the lease of the tenant without the need to go to court.
All enforcement agents at CMD are fully certificated and have complete knowledge and understanding of the Taking Control of Goods Regulations 2013 for Rent. Their sensitive, professional and discreet approach to each case is of paramount importance to allow a landlord/ tenant relationship to continue after instruction. CMD have built a reputation to maintain high standards of service in dealing with any amount of commercial rent owed for their client.
How is Commercial Rent Arrears Recovered?
Commercial rent is collected using our pre-legal debt recovery methods.
Professional and discreet
All of our enforcement agents are fully certified and conversant with the Taking Control of Goods Regulations 2013 for Rent. We offer a highly professional and discreet service which enables landlord-tenant relationships to continue after rent is collected. We can deal with any amount of commercial rent and can come to your assistance whether you expect your tenant will be able to settle their debt quickly or not. The new legislation means it’s necessary to act swiftly if you have problems with rent arrears so that we can issue a compliance letter. When you instruct us, we will send a letter out to your tenant instructing them that they have 7 days to make the payment.
The collection and enforcement of CRAR is split into three stages, which are compliance, enforcement and sale.
Compliance and Enforcement
There are no charges to the landlord during the Compliance stage, though the tenant will need to pay £75+ VAT if this stage is reached. They will face no further charges if full payment or payment agreement accepted by you is agreed within 7 days. If they do not meet these demands, the case will move to the Enforcement Stage. At this stage, a certified enforcement agent will attend the premises to collect the balance in full. Alternatively, they will Take Control of the Goods or enter into a payment agreement. The case will automatically move to the Sale Stage if the tenant fails to come to an arrangement or refuses to settle the debt in full. The landlord is permitted to instruct us to remove goods or sell them to cover the outstanding arrears.
The Sale Stage
The Sale Stage often comes into force when a Controlled Goods Agreement and/or payment arrangement is defaulted on. When this stage is reached, the tenant can be handed a 48-hour default Notice of Intention to re-enter the premises. If the tenant does not pay the outstanding balance in the 48-hour period, removal action can take place. Landlords may also be able to cover costs such as expenses for auctioneers, storage, locksmiths and advertising.
Why Choose Collect My Debt?
At Collect My Debt, we can come to your assistance if you need any help with commercial rent arrears recovery. We have several decades of experience to draw upon and have held a Bailiff Certificate/ Enforcement Agent Certificate since our inception. We have an excellent track record in recovering monies for individuals and businesses of all sizes. To find out more, call 0800 612 5161 or send an e-mail to firstname.lastname@example.org. Alternatively, contact us through our website.
If you have outstanding rent arrears, regardless of whether you think your tenant may be able to pay you in full a couple of days after the due date or not, you must act promptly and instruct CMD to commence the recovery process.
We have years’ of experience and knowledge behind us now since the introduction of the new Act. These legislation changes make it impossible to just turn up once your rent falls into arrears and make a demand for full payment. A letter has to be sent out to the tenant first by the enforcement agent company, we cannot issue that letter known as the compliance letter until instructed proving that acting immediately will increase the overall successfulness of the recovery of your outstanding rent.
Once instructed, CMD will send a letter to the tenant giving them 7 days to make payment. This stage is known as the Compliance Stage. There are three stages in total for the collection and enforcement of CRAR following our client’s instruction, these stages are explained in more detail below;
New regulations set out by CRAR for this compliance stage of enforcement payable by the tenant is £75.00 + VAT.
If the tenant does makes their full payment or enters a payment arrangement acceptable to the client within 7 days, then there will be no further charges.
It is FREE to Instruct CMD, we do not charge landlords or managing agents.
If for any reason the tenant fails to make the full payment or agree a suitable payment arrangement after the Compliance stage, then the outstanding case will automatically move to the Enforcement Stage.
Due to a failure of payment in full or agreement at the compliance stage one of our certificated enforcement agents will then attend the demised premises to collect the outstanding balance in full, Take Control of the Goods or enter into a Controlled Goods Agreement.
The enforcement stage costs for this action as set out by Tribunals Courts and Enforcement Act 2007 are as follows:
Debt arrears less than £1500 – Enforcement Fee = £235 + VAT
Debt arrears of £1500 and above – Incurs the Enforcement Fee of £235 + VAT covering the first £1500.00 of the debt (as shown above)
A further 7.5% + VAT is chargeable on £1500.01 and above.
After taking control of the goods, where the tenant fails to pay in full or refuses to make a payment arrangement that is acceptable, the landlord can instruct CMD to remove, or secure goods on site then sell the goods to cover the outstanding arrears. In this situation the case would automatically escalate to the final stage known as Sale Stage with no further written notification needing to be given prior to escalation.
Should a situation arise where a payment arrangement previously entered into with a tenant following a Controlled Goods Agreement has since been defaulted on, the landlord can instruct CMD to issue a default notice to the tenant with a view to removing, or securing the goods on site, then sell the goods if necessary to cover the outstanding arrears if full payment is not received. The final stage is known as the Sale Stage.
There are two ways in which a case can progress to the Sale Stage as follows:
- Whilst the enforcement agent is on site, at the enforcement stage, if for any reason there is no full payment, or acceptable payment arrangement arising, but the goods on site are considered to be of sufficient value to cover the outstanding arrears and enforcement fees, then the enforcement agent has the powers to escalate to sale stage with immediate effect and commence the removal.
- Or and usually the most common way of escalation is where the enforcement agent did enter into a Controlled Goods Agreement at an earlier stage, a payment arrangement was also entered into with the tenant which they then defaulted on. In this instance, the tenant must be given a 48-hour default notice known as “Notice of Intention to re-enter the premises”. This notice gives the tenant an opportunity to pay the outstanding balance in full prior to any removal action commencing.
The Sale stage costs of enforcement to the tenant are:
Debt arrears less than £1500 – Sale Fee = £110 + VAT
Debt arrears of £1500 and above – Incurs the Enforcement Fee of £110 + VAT covering the first £1500.00 of the debt (as shown above)
A further 7.5% + VAT is chargeable on £1500.01 and above.
In addition to the above enforcement agent costs, there are certain recoverable disbursement costs such as locksmith, storage, advertising and auctioneer fees. Other disbursement costs may also be recoverable but only with a successful application to a court
Where tenants are refusing to pay or defaulting on controlled goods agreements, escalation and use of the Sale Stage is often the best form of action. Landlords should not be afraid to instruct it. However, where there is a shortfall after completing the sale of the goods, the landlord may be accountable for the outstanding balance as disbursement charges are recoverable from any monies recovered first.
What Our Customers Are Saying
Don’t just take it from us, let our customers do the talking!
To all at CMD,
Thank you for efficiently and successfully carrying out my CRAR instruction. I had little knowledge of the new legislation that is in place so was unsure how the CRAR process worked. Collect My Debt explained step by step the process and how much involvement and information they needed from myself. Luckily once I gave the instruction Collect My Debt took care of the rest, which greatly put my mind at ease. Collect My Debt collected over 75% of my outstanding rent on the same day of attendance, the rest was collected on an arrangement over the next 2 weeks or so. I had been chasing this debt for over 6 months and neither I or another enforcement company was able to do anything about it, I was told the debt was ‘un-collectable’ and to ‘forfeit the lease’ that’s when I decided to try someone else. If you have old or new debts owed to you and you feel or are told that they are un-collectable give Collect My Debt a try, I couldn’t recommend them enough.C M Johnson
Collect My Debt,
The service you provide is nothing short of fantastic! The success you have had for me over the last 6 months has been unbelievable, collecting some rent debt I thought was lost. I thought collecting under the new legislation (CRAR) was going to be a waste of time. How wrong was I! Give Collect My Debt a go, I wouldn’t look anywhere else any more for any of my enforcement issues, they don’t just do the job, they excel.Frank Samuels
It is a pleasure for me to be able to recommend your services.
The enforcements under CRAR you have carried out for us have been extremely effective, your high success rates have amazed me and my fellow directors along with your solutions to any further issues we have along the way, your advice and knowledge is second to none.James Bailey-Matthews