Since April 2014 any landlord wishing to seize its tenant's goods against the value of any rent arrears has had to rely on CRAR, the Commercial Rent Arrears Recovery regime, which replaced the old law of distraint.
There are a number of criticisms of the CRAR system including:
- it is too heavily regulated;
- it only covers pure rent arrears and not service charges or insurance rent (even if reserved as rent under the lease);
- tenants must be given seven days' warning before any seizure of goods; and
- the system is more complicated than many other debt recovery alternatives.
In addition, there is evidence that tenants are prepared to pay the £75 fee due when the seven days' notice is issued as it is a far cheaper alternative to an overdraft for that period.
Given criticisms of the new system, a Government review was started in early 2015. The outcome of the review has recently been reported and concludes that no changes are required. This seems a great pity as many believe the system could do with some improvement.
The shortcomings of CRAR mean landlords are frequently looking to rely on other enforcement options, such as service of statutory demands or the threat of forfeiture.