crar history property management guideOn the 6 April 2014 the CRAR (Commercial Rent Arrears Recovery) scheme took effect after years of preparation and delays. Right back to the last government and the Tribunals, Courts and Enforcement Act 2007 (TCEA 2007) was when the first serious steps were taken with this change in legislation, some 6 odd years ago, and which formed the basics of what CRAR would involve.

A significant part of the new system will be explained through further regulations, however it wasn’t until the start of 2013 that the government announced that this was then off the back-burner which resulted in the Taking Control of Goods Regulations 2013 in July 2013 providing the long-awaited details on how the new CRAR procedure will happen with further legislation to follow so that implementation can begin on the 6 April 2014.

In short, this new procedure called Commercial Rent Arrears Recovery (CRAR) has replaced the current ancient common law of Distress for Rent which forms the current basis of being able to take action to recover rent arrears in commercial properties using ‘bailiffs’. This original law dates back to medieval times and the Statute of Marlborough 1267, and which forms the legal principle of currently being able to recover rent arrears. The Distress for Rent Act 1689 then shaped how the remedy operates, and then back in the 1960s Lord Denning MR commented that the distress for rent is “an archaic remedy that has largely fallen into disuse”.

Therefore this current remedy which has been around for decades provides the legal right of ‘distress’ where a landlord can instruct a bailiff to attend a property and collect rent or seize goods and hold until outstanding arrears are paid. In 1969 this power was also extended to allow seized goods to be sold to recover these arrears without having to even notify the tenant of any intension to exercise distress and without having to obtain any form of court permission unless the tenant was insolvent.

It’s a cheap and effective course of action by landlords which does what it says on the tin – shock tenants into serious action to pay any rent arrears otherwise they will take matters (and literally goods) into their own hands. In today’s modern society and world of rights, it is perceived as an outdated and barbaric form of action, hence the pressure over the last few years and even decades for the government to look at changing the law that allows this – leading to the current piece of legislation and the new CRAR Commercial Rent Arrears Recovery scheme.

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