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Posted 4 April 2014
by Paul Kelly

Tribunal, Courts and Enforcement Act 2007 – The Commercial Rent Arrears Recovery Scheme

From 6 April 2014 the Tribunal Courts and Enforcement Act 2007 (“the Act”) will come into force reforming the procedure that enforcement agents must follow when seizing goods to sell to pay for rent arrears owed by the tenant.

These changes will affect all park owners who lease out commercial properties. Currently a park owner who leases a commercial property can instruct an enforcement agent or bailiff to “distrain” (which means seizing goods to sell) in respect of rent arrears but as of 6 April 2014 the right to levy distress in respect of debts will be abolished by the Act.

The right to distress will be replaced by Commercial Rent Arrears Recovery (“CRAR”) which will be the method by which a park owner, who has granted a written lease of commercial premises, must follow in order to authorise an enforcement agent to seize goods for sale in settlement of rent arrears. The CRAR regime will not be available to park owners who lease premises as dwellings.  Furthermore it can only be used for the recovery of rent and does not apply to ancillary sums such as service charges, repairs or maintenance costs.

In order to exercise CRAR there must be an outstanding rent of an amount equal to at least 7 days’ rent and the debtor must be given at least 7 clear days’ notice of enforcement. The notice of enforcement sent to the debtor must comply with the requirements laid down in The Taking Control of Goods Regulations 2013 in order to be valid.  Upon the expiry of the notice an enforcement agent will be able to recover goods owned by the debtor in order to pay the outstanding amount.

The regime also provides that where the park owner has the right to exercise CRAR against their tenant and the premises are sub-let, the park owner will have the right to give the sub-tenant at least 14 days’ clear notice that after that period they should pay their rent direct to the park owner until the outstanding sums have been paid.

If you have any queries about Commercial Rent Arrears Recovery then contact the parks team by telephone 01392 207020 or email parks@tozers.co.uk

 

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About the author

Paul Kelly

Partner

Paul is the managing partner of the firm