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Commercial landlords put on notice by CRAR introduction

9 August 2013

With UK retail sales for July 2013 reaching their highest level since 2006, tenants will welcome news that landlords’ remedies for recovering rent arrears are to be restricted.

From 6 April 2014 the right of distress to recover arrears of rent will be replaced with Commercial Rent Arrears Recovery (CRAR).

CRAR will curtail a landlord’s ability to enforce against tenants of commercial premises as it limits them to recovering arrears of ‘basic rent’ and not service charge, insurance charges, etc. Tenants will also benefit from a new system of checks and balances, including the introduction of a seven day notice period of intention to send in the bailiffs.

CRAR brings welcome news to tenants of commercial premises as it limits the ability of landlords to take immediate enforcement action without prior notice. Given the introduction of the seven day notice of intention, landlords may look to avoid CRAR and instead rely more heavily on alternative forms of security, such as rent deposits and recourse to guarantors.

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