Rent arrears system set to change

A new process for commercial landlords to recover the rent arrears of tenants is set to be introduced alongside new rules to protect vulnerable people from aggressive bailiffs.

Commercial Rent Arrears Recovery (CRAR), which received Royal Assent in 2007, will now be implemented by the government. It replaces the right to distress and will only be available for pure rent arrears, including VAT and interest on the rent. However, service charges and insurance costs will not be covered.

Furthermore, landlords will have to give the tenant seven days’ notice before using enforcement agents, which could offer tenants the opportunity to remove goods before the enforcement agents arrive.

Consequently, the government will work with creditors and the enforcement industry to consider the consequences of the time period, as well as resolving other inadequacies in the current legislation, before preparing a final set of regulations.