What is CRAR for commercial rent arrears

Affected by Covid-19? Immediate Rescue Or Closure Options Available

FAST Free Director Advice & Support, With 100+ offices Nationwide our Licensed Insolvency Practitioners can Help Today.

Updated: 17th June 2021

My business is struggling with commercial rent arrears

During the lifetime of your company, your business may experience financial difficulties as a result of low cash flow, a drop in sales and competition in the market, leaving you with outstanding rent payments. If your business is in financial distress and you can’t pay the rent, your landlord can take action against you to recover rent arrears.

Please note, a temporary restriction until 25 March 2022 is in place for landlords using Commercial Rent Arrears Recovery (CRAR) to seize goods.  

The reform to rent recovery legislation, Commercial Rent Arrears Recovery (CRAR), means that your landlord can seize your goods with prior notice of 7 days if you cannot pay your business lease. This gives enough time to negotiate a financial plan which works for both parties. If unsuccessful, this time period can be used to explore restructuring options with a licensed insolvency practitioner to rescue your business and protect company assets.

What is Commercial Rent Arrears Recovery?

Commercial Rent Arrears Recovery, often referred to as CRAR is a legislative measure which replaced the law of distress on 6 April 2014. If the rent for a commercial property falls into arrears, the landlord is able to take control of the tenant’s goods and sell them to recover the outstanding rent.

The premises should be wholly for commercial use, not mixed or residential use. For example, if the property is commercial downstairs, but comprises of an apartment upstairs, CRAR will not be enforceable.

The prescriptive measure sets out a procedure which can be followed by the landlord of your commercial property to collect unpaid rent. We set out what action a landlord can take to recover commercial rent arrears and your rights and responsibilities during the proceedings if you cannot pay rent to your landlord.

In order for the commercial landlord to successfully enforce CRAR, the following conditions should be met:

  • The lease must be in writing
  • CRAR cannot be used after the lease has ended due to forfeiture
  • Only rent payments can be collected, including VAT and interest. CRAR cannot be used to recover service charges, insurance premiums, business rates or other extra charges.

Commercial Rent Arrears – What are your rights?

Under CRAR guidelines, the landlord must give the following notice to the tenant before a bailiff acting on behalf of the landlord can enter the commercial premises. ‘Clear days’ exclude Sundays and bank holidays.

  • The landlord must give 7 clear days’ notice of attending the premises.
  • Prior to the seizure of assets, 7 clear days’ notice should be given laying out the intention to do so. Bailiffs are able to enter before this date, but they are unable to take control of assets prior to, or during the 7 days’ notice period.
  • If there are no goods to take following the arrival of the bailiff, or the goods are of low value, the bailiff is able to return 12 months following the date of the enforcement notice to take control of your goods.

Bailiffs entering the property should do so in a peaceful manner, using normal means. For example, using doors or loading bays, not windows. Bailiffs are only able to call at the commercial premises between 9:00am to 6:00pm, unless your business is operational out of hours. Once bailiffs enter the property, they are not required to give you time to pay, unless agreed with the landlord.

What goods can be seized?

If you are unable to come to an agreement with the landlord as you can’t pay rent, the bailiff will be able to seize goods belonging to you, or the group of people responsible for paying the rent. The goods which are exempt are as follows:

  • Equipment used to carry out your job, business or education, such as telephones, computers and vehicles, up to a total value of £1350.
  • Items you are physically using, where if the bailiff would take them would be a breach of peace.
  • Goods belonging to someone else cannot be taken, including goods which are rented or leased.

Goods jointly owned by you and a business partner can be taken. If your share of a joint rent payment is in arrears as you can’t afford to pay the rent, the bailiff is allowed to take your share of goods.

If a bailiff takes control of any exempt goods, a court claim can be made, requesting for the goods to be returned.

What happens to the goods?

If you negotiate a repayment plan with the landlord, also known as a controlled goods agreement, the goods will remain with you. The arrangement will consist of either paying your outstanding debt in instalments until the commercial debt is cleared or making a bulk payment. If a controlled goods agreement is broken, you are entitled to 2 days’ clear notice for the bailiff to return and take control of the goods.

If you cannot pay the landlord, your goods will be removed and typically sold at an auction. Alternatively, under order of the landlord, the bailiff can lock up the goods and even seize control of the business premises.

You are required to receive the following notice 7 clear days before your goods are sold:

  • Value of goods
  • Details of auction location (or location of sale)
  • Details of auction time (or time of sale)

As the tenant of a commercial property in rent arrears, CRAR can be used against your business, leaving your commercial assets vulnerable and at risk. If CRAR is not applicable, the landlord is able to take court action to recover arrears, which could cost you in court fees.

If your business is in financial distress and you cannot pay your business lease, rescue options such as restructuring or turnaround can help transform your business into a profitable enterprise. Get in touch with a licensed insolvency practitioner at Real Business Rescue today on 0800 644 6080 to arrange a free, no-obligation consultation.

Jonathan Munnery


0800 644 6080
Director Support - Business suffering from Cash-Flow Problems?
If your company is financially distressed, we also offer the below services:
Business debt recovery

  • Recover Unpaid Invoices of £5k+
  • Expert Credit Control Services
  • Stop Late Payers & Bad Debts
Visit Site
Time to pay experts

  • Get Breathing Space with HMRC
  • Support with Business Tax Arrears
  • 35 Years HMRC Negotiation
Visit Site
UK Business Finance

  • Rejected for a CBILS Loan?
  • Get Emergency Business Funding
  • Supporting 1000+ UK Companies
Visit Site
Who we help
  • Company Directors
  • Finance Directors
  • Sole Traders
  • Accountants
  • Small Businesses
  • Large Businesses
  • Partnerships
Contact our team
Jonathan Munnery
Gillian Sayburn
Julie Palmer
or Find your Nearest Office

Here at Real Business Rescue we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See PRIVACY POLICY

Business Rescue Advice for Directors
Free Guide for Limited Company Directors
Business Rescue Advice for Directors
  • How to manage company cash flow problems
  • Advice on dealing with HMRC
  • Understanding rescue and closure options
  • And much more...
Free Guide Download
Dealing with your Insolvent Clients
Business Rescue Guide for Accountants
Dealing with your Insolvent Clients
  • Helping you advise insolvent clients
  • Spotting signs of client distress
  • Exploring business rescue options
  • And much more...
Free Guide Download
Our numbers speak for themselves
Number of UK Offices
Directors Helped
Licensed Insolvency Practitioners

This site uses cookies to monitor site performance and provide a more responsive and personalised experience. You must agree to our use of certain cookies. For more information on how we use and manage cookies please read our PRIVACY POLICY