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For landlords or their managing agents faced with commercial tenants who fail to pay their rent, may find that it moves rapidly from simply a source of frustration to situation that can be materially damaging to a business.
Essex Bailiffs have a region wide team of Certificated Enforcement Agents who will recover your rent, interest and VAT payable under a commercial property lease. There is no requirement to obtain a court order as our agents are authorized to act under the regulations contained in the Tribunals Court and Enforcement Act 2007.
Upon instruction, a Notice of Enforcement will be issued allowing the debtor seven clear days to pay. After this notice has expired, our agents will make an attendance at the property to collect payment in full. Should no payment be forthcoming from the tenant, their goods may be removed for sale.
However, if settlement is not achieved and we are instructed to set a short term arrangement to pay, we will take control of goods as security against the debt. Should this arrangement break down the goods may be removed and sold to discharge any outstanding balance. All of our agents are aware that each case is unique and are always sensitive to each client’s specific requests, and recognise that ultimately the goal is to recover what is owed, quickly, but with the least fuss as possible.
The collection of the Service Charge, Insurance, deposits, and utility arrears fall outside the CRAR regulations. However Essex Bailiffs will aim to recover these debts in full, alongside the collection of the outstanding rent. There is NO COST to the landlord for the recovery of the Service Charge, Insurance, Deposits or utility arrears, provided we are simultaneously instructed under CRAR to collect the rent due.
Frequently Asked Questions
1 What does a bailiff do in commercial rent arrears collections?
A bailiff, acting as a Certificated Enforcement Agent, enforces the recovery of unpaid commercial rent under the Commercial Rent Arrears Recovery (CRAR) process.
2 What is CRAR (Commercial Rent Arrears Recovery)?
CRAR is a legal process allowing landlords of commercial properties to recover unpaid rent by taking control of a tenant’s goods without a court order.
3 What types of debts can be recovered through CRAR?
CRAR applies only to unpaid commercial rent. It cannot be used to recover service charges, insurance premiums, or other non-rent payments unless they are specified as rent in the lease agreement.
4 Can a bailiff enter a commercial property to recover rent arrears?
Yes. Under CRAR, a bailiff can enter the commercial premises to seize goods. Entry must be peaceful and typically occurs during standard business hours unless otherwise agreed.
5 How much notice must be given before enforcement action?
Landlords must issue a Notice of Enforcement giving the tenant at least seven clear days' notice (excluding Sundays, Bank Holidays, and public holidays) before a bailiff takes action.
6 What happens if a tenant refuses to pay rent after a notice is issued?
If the tenant does not settle the arrears within the notice period, the bailiff can attend the property, take control of goods, and potentially sell them to recover the rent owed.
7 What fees are associated with CRAR?
CRAR fees are structured as follows:
- Compliance stage: £75 for issuing the enforcement notice.
- Enforcement stage: £235 plus 7.5% of debts over £1,500 for visiting the premises.
- Sale or disposal stage: £110 plus 7.5% of debts over £1,500 for selling seized goods.
8 Are there any restrictions on what a bailiff can seize under CRAR?
Yes. Bailiffs cannot seize essential items necessary for the tenant’s business operations (e.g., tools of the trade up to £1,350 in value) or goods not owned by the tenant.
9 Can a landlord negotiate a payment plan instead of enforcement?
Yes. Landlords can agree to payment plans before or after issuing the Notice of Enforcement. This is often a preferred option to avoid disruption and preserve the tenant-landlord relationship.
10 What are the alternatives to CRAR for recovering commercial rent arrears?
Alternatives include:
- Negotiating directly with the tenant for payment.
- Pursuing legal action for debt recovery.
- Exercising a forfeiture clause in the lease to terminate the tenancy and regain possession of the property.