Before sending in the Bailiffs (or High Court Enforcement Agents) to recover most debts, Court action is needed. But did you know, when the debt accrues from commercial rent arrears, there are options to enforce without the expense and time of court action.

At Curtis Law Solicitors we have an expert team on hand to assist in all kinds of debt recovery matters, including Commercial Rent Arrears Recovery.

Commercial Rent Arrears Recovery (CRAR).

• The property must be entirely commercial and not include any ‘dwelling’. Even if the dwelling is not currently in use, CRAR is not possible if it is included within the same lease.
• The Lease must be in writing. A verbal lease is not good enough.
• The entirety of the unpaid rent can be recovered, with a minimum of 7 days arrears. However, any unpaid bills, business rates, council tax or legal fees cannot be recovered under CRAR.
• A formal Notice must be served, allowing 7 clear days before enforcement action can begin. We are often instructed to proceed with service of a notice and can engage an Enforcement Agent to serve it the same day!
• Once the Notice has expired, the enforcement Agent can attend and secure peaceful entry to the property. It helps to provide as much detail as possible about the occupier; what are their usual hours of business, when would the premises be empty, and when would they be open, as this will assist in the enforcement.
• The Enforcement Agents can then take control of goods in the premises to meet the rent arrears. The mere threat of doing so is often enough to secure payment, but the Agents do have significant powers to take control of goods.
• A detailed inventory will be taken, and the Agents have the power to remove goods, secure them on the premises, or enter a Controlled Goods Agreement.
• The most common would be a Controlled Goods Agreement, allowing the goods to remain in the premises, but granting a power to return and remove the goods at a later date. This is very often enough to secure payment of any arrears.
• It is a criminal offence to intentionally obstruct an Enforcement Agent, or to interfere with Controlled Goods. Breaches of these can lead to fines up to £2,500 and/or lengthy prison sentences.

In instances where CRAR is not appropriate, a landlord faced with Commercial Rent Arrears may proceed with a forfeiture of the Lease. This is a separate option, but is often considered alongside CRAR when advising a Landlord. Forfeiture of Lease.

• Peaceful re-entry is again required, but this time the enforcement Agent would prefer to attend when the tenant is not present, rather than attending under CRAR when the premises are open.
• There are again various factors which must be present in order to proceed with a forfeiture. There must be a clause in the lease allowing for it, and again there must not be a dwelling included in the lease.
• Forfeiture does not allow a Landlord (or Agent acting on their behalf) to seize goods. It secures the property, but does not give a lien on the goods. The tenant must be allowed an opportunity to return and retrieve their goods.
• It is crucial to keep the site secure after forfeiture, guarding against the tenant simply returning and gaining re-entry. Security on site in the short term is advisable.

If you have a Commercial Tenant who is in arrears, or is struggling to make payments, it is crucial that you take expert advice on your options. In certain circumstances, the Enforcement Agents only get one attempt and it is important to ensure that they are given the best possible opportunity to successfully recover the debt or the premises. Information is key.

Curtis Law Solicitors have a dedicated team in the Litigation and & Debt Recovery department, happy to assist in Commercial rent matters. We can provide free initial advice and always work to pre-agreed Fixed Fees.

Please contact Iain Blundell or Bethany Wetherby-Green on 01254 297130.