Commercial Rent Arrears Recovery (CRAR) – Further Extension To Restrictions On Commercial Landlords Recovering Rent From Tenants

On Thursday, 25th March 2021, the Taking Control of Goods (Amendment) (Coronavirus) Regulations 2021 (SI 2021/300) (Regulations) come into effect which, along with many other measures, will provide a further extension to restrictions on recovering rent from commercial tenants via the Commercial Rent Arrears Recovery (CRAR) process until the end of June 2021.

The Regulations follow on from the Government’s announcement in early March which outlined a number of support measures for commercial and residential tenants in England. One of the fundamental aspects included in this announcement was an additional increase in the total number of days’ outstanding rent required before the CRAR process can be used by landlords.

The new Regulations increase the total number of days’ outstanding rent required for CRAR to be used to 457 days’ between 25th March and 23rd June, and 554 days’ between the 24th and 30th June.

By putting in place this extension, the Government is hoping that it will allow for the businesses worst affected by pandemic – such as those in the hospitality sector – to recover when they are allowed to fully reopen (no sooner than 17th May 2021).

Advice to landlords

Whilst the Regulations place significant restrictions on landlords wishing to use the CRAR process, it is still available to landlords where the above requirements can be met and it remains a viable option.

It is important for commercial landlords to be aware that all is not lost and that there are options available to them. In these difficult times, where the financial reality of overdue and unpaid rent makes matters increasingly hard for landlords, there are processes available which perhaps have been overlooked or disregarded.

Undoubtedly communication between landlords and tenants is a key factor and the reality is that these restrictions will end in due course, whereupon tenants will be required to bring their financial obligations up to date. In the interim however, landlords should consider how the financial impact they are currently experiencing with unpaid rent, can successfully be recovered.

How can Nelsons help?

For more information or advice in relation to the extension of the CRAR or any related topics, please call Simon Waterfield, Oliver Maxwell or another member of our Property Disputes team in Derby, Leicester or Nottingham on 0800 024 1976 or contact us via our online enquiry form.