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New Commercial Rent Arrears Recovery Regime (CRAR)
Distress for rent is to be abolished on 6th April 2014, being replaced with the new “Commercial Rent Arrears Recovery” (CRAR) regime.
The CRAR will apply to all commercial tenancies so long as the tenancy is in writing and will not apply to licences.
CRAR will not apply if any part of the premises is let or occupied as a dwelling unless the residential use is in breach of the Lease.
CRAR only covers rent, which is defined as the amount paid for the possession and use of the premises plus VAT and interest, but does not include rates, Council Tax, service charges, repairs or maintenance, insurance or other ancillary payments, even if these amounts are reserved as rent in the Lease.
A CRAR enforcement notice can only be given where there are arrears of rent of an amount at least equal to 7 days’ rent and can only be exercised by an enforcement agent and only if the tenant has been given at least 7 clear days’ notice (excluding Sundays, Bank holidays, Good Friday and Christmas Day).
CRAR covers property of any description other than land but certain goods are exempt, including items necessary for a tenant’s personal use in his employment, business, trade, profession, study or education (which can include computers and vehicles) and clothing, bedding, furniture and household equipment.
CRAR does not apply to service charges and a tenant has to be given 7 days’ prior notice which gives them time to remove goods.
If you would like advice on a commercial rent issue, or any other Commercial Property issue, please contact either Judith Bleetman, Partner, at our Cockfosters Office or our Head of Property, Perry Gear, at our Barnet Office.