Commercial Rent Arrears
SLC Solicitors have developed a team specifically to deal with commercial rent and service charge arrears as we appreciate that not all sites our clients manage will be solely residential. Our team are highly knowledgeable on the differing legislation governing commercial lettings and are able to provide an in-depth specialist service on all aspects of commercial rent and service charge arrears including re-entry, commercial rent arrears recovery (CRAR), forfeiture and possession proceedings.
Working closely with enforcement agents the team achieves a high recovery success rate.
Commercial rent and service charge collection legislation has recently altered dramatically but our team keeps abreast of the latest updates to provide the best service.
Commercial Rent Arrears
In April 2012 the Law of Distress, which previously allowed collection of commercial rent and service charge (where it was reserved as rent under the lease) by way of seizing goods, changed to CRAR. This is the new name for distraint, which will be carried out by Enforcement Agents, formerly certificated bailiffs. The methods of exercising CRAR are extremely stringent and often not viable for clients so we try, wherever possible, to suggest an effective alternative method of recovery.
The new process of CRAR is only available for commercial premises where there is written evidence of a tenancy and can only be used to recover rent owed in respect of those premises. Service charges, even where they are reserved as rent, will not be recoverable using the CRAR process.
If an enforcement agent is to be instructed, notice will have to be given to the tenant before enforcement action is taken and enforcement can only take place during normal trading hours, rather than between sunrise and sunset as it was under the Law of Distress. This means that, in a large number of cases, the tenant takes steps to ensure that no goods of value remain on the premises when the enforcement agent arrives.
Since the introduction of CRAR we have, where possible, sought to recover commercial service charge for our clients by the issue of a Forfeiture Notice under s146 of the Landlord and Tenant Act 1925. We find that the threat of forfeiture is often enough to prompt rapid payment, failing which the process can be followed by seeking a possession order.
It is important to remember that whilst you are no longer able to seize goods in satisfaction of unpaid rent, it is still possible to forfeit the lease by peaceable re-entry where commercial rent is owed.