Commercial Rent Arrears
In April 2014, the Common Law remedy of distraint for rent was abolished. This was replaced by Commercial Rent Arrears Recovery (CRAR), and Section 72 allows a Commercial Landlord to use Schedule 12 (taking control of goods) of the Tribunals Court and Enforcement Act (TCE Act 2007) to recover rent payable under the lease, from the tenant without the need to go to Court.
The steps required for Commercial Rent Arrears Recovery are:
- Following the change in regulations back in April 2014, the Enforcement Agent is now legally obliged to send the Debtor a “Notice of Enforcement” (Otherwise known as a Compliance Letter) giving the Debtor 7 clear days to contact them to arrange payment. At this point, this incurs a fee of £75 added onto the initial debt.
- If they fail to contact the Enforcement Agent, then he will call to the property, during opening hours, where he will Take Control of Goods, as per the TCE 2007 Act and TCOG Regulations 2013. This incurs a fee of £235 (plus 7.5% of the initial debt of anything over £1500) to be added onto the outstanding balance.
The EA can then either;
- Remove the goods from the premises to be sold at auction in an attempt to cover the outstanding debt (Actual Seizure). At this point an Enforcement Agent sale and removal fee of £110 (plus 7.5% of the initial debt of anything over £1500) will be added to the outstanding balance.
- With your agreement, we enter into a Controlled Goods Agreement, whereupon the goods are still listed on paper (Constructive Seizure), but the Debtor can keep them, and to utilise them in order to continue trading, but agrees to pay the debt back in installments. Should they fail to do this, the goods can then be removed.
- The goods can be secured on the premises, in such a way to prevent the Debtor having access to them, or any use of the goods being made. If this is not possible and there is no other way of securing the goods (in the case of business premises) the whole of the premises containing the goods (or the non-domestic part of a mixed-use premises) may be secured and the goods could be sold on site. Or, the Enforcement Agent could also remain on the premises to guard the goods until they are secured, or arrangements for removal are underway.
At Revenue Services Ltd, all of our Enforcement Agents are fully Certificated, and have the experience and full knowledge of the new laws of Taking Control of Goods Regulations 2013 for rent. Each Enforcement Agent at Revenue Services has passed a Level 2 IRRV accredited examination, set by the Civil Enforcement Agency (CIVEA) in Taking Control of Goods and also a Level 3 Staffordshire University Law School examination for Civil Enforcement.
We treat all cases with professionalism and discretion wherever possible, in order to allow the Landlord and Tenant to continue their relationship in the future. Best of all, it’s free to Landlords, as all costs are borne by the Commercial Tenant.
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With Revenue Services the communication is great and the service provided is extremely prompt and professional. They always go that extra mile and are on hand for advice throughout. We found their charges to be very reasonable also. I would not hesitate to recommend them.
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