Since the changes were introduced to the collection of commercial rent arrears, only pure rent can be collected. However, other elements, such as utility bills and service charges, can be recovered through the business debt recovery process.

 

Commercial Rent Arrears Recovery

From April 2014, the Commercial Rent Arrears Recovery (CRAR) system was introduced. This is a free service for landlords where they have a statutory right to recover their arrears.

Once the rent is at least seven days overdue the recovery process can begin. A certificated enforcement agent (bailiff) must be used to carry out a CRAR. They will send a compliance notice to the tenant, providing seven clear days’ notice of their intention to visit. The tenant must pay in full before this date, or agree a payment plan, to prevent any further action.

All the recovery fees are paid by the tenant  – there are no costs to the landlord for a CRAR. Once the rent arrears have been collected, the landlord receives the full amount of the debt. We don’t take any commission for recovering the rent arrears.

You can find out more about how to recover outstanding commercial rent here.

 

Recovering commercial utility and service charges

With the introduction of the new commercial rent arrears recovery process, anything that is not classed as pure rent cannot be collected in this manner. This includes electricity and water charges and service fees.

However, at CEA Ltd, we recover these costs as a business debt at the same time as the rent arrears. When instructed alongside commercial rent arrears we offer this as a free service to clients.

This provides commercial landlords with a cost-effective solution to recovering their tenant’s arrears. We offer a one-stop option, where the same team will deal with your rent arrears and debt recovery.

The initial business debt recovery letter will be sent out at the same time as the compliance notice for the rent arrears. This highlights to the tenant exactly how much is owed and the current extent of the fees they are occurring.

Where there has been no contact before the compliance period expires, an enforcement agent will attend at the business premises. At this point, they will be looking for the tenant to pay the arrears in full or establish a payment plan that is acceptable with the landlord.

 

How to recover commercial rent arrears?

There are a few instances where the CRAR process is not suitable for use. This includes premises that have a mixed use or residential lease attached to them and where the lease has already come to an end.

If you’re in any doubt as to the appropriate way of collecting commercial rent arrears, our team can talk you through the process. We will ensure that this is the best course of action in your circumstances and that everything is conducted legally.

In order to instruct CEA Ltd to collect your commercial rent arrears and business debts, all you need to do is contact us on 0113 532 8350 or email office@cealimited.co.uk.

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