The most important practical point about CRAR is its restriction to pure commercial use. If any part of the premises is used as a dwelling — even a caretaker's flat above a shop, or a bedsit let alongside a commercial unit — CRAR cannot be used for those premises. The entire premises must be used solely for commercial activity. Mixed-use landlords with part-residential, part-commercial properties must recover rent arrears from the residential elements through the standard possession and debt recovery routes, and can only use CRAR for the purely commercial elements (if those are let under a separate written lease).
Even for qualifying commercial properties, CRAR comes with strict procedural requirements that are easily breached. The landlord cannot exercise CRAR directly — a certificated enforcement agent must be instructed. The minimum debt threshold (7 days' net rent) must be satisfied. A 7-clear-day notice must be served before any action is taken. Failure to follow these requirements can expose the landlord to a claim for wrongful interference with goods. Getting CRAR right is a matter for a specialist enforcement agency — not a DIY process.
Who can use CRAR, the 7-day notice procedure, and what can be seized
The eligibility requirements, notice procedure, and scope of CRAR for commercial landlords:
- Eligibility, minimum debt, and certificated enforcement agents: CRAR can only be used by: (1) a landlord of commercial premises (any part of the premises used as a dwelling disqualifies CRAR for that lease — entirely); (2) under a written lease (CRAR does not apply to oral leases or licences to occupy); (3) where the net unpaid 'pure rent' (not service charges; not insurance; not other payments unless expressly reserved as rent in the lease) is at least 7 days' worth of rent. Calculating 7 days' rent: annual rent ÷ 365 × 7 — so a property at £52,000/year requires at least £996.16 of net unpaid principal rent before CRAR can be exercised. CRAR cannot be used to recover service charges, insurance premiums, administration fees, or other monies — only the element of the tenant's payments expressly reserved as 'rent' in the lease qualifies. This is a material restriction for landlords who use a 'global' rent figure that includes service charge elements — the lease wording must clearly establish what is 'rent'. Certificated enforcement agents: the landlord cannot personally exercise CRAR (unlike the old common law distress, which a landlord could exercise in person). Under TCEA 2007, only enforcement agents certificated by the county court under the certification regime in the Taking Control of Goods (Certification) Regulations 2014 can take control of goods. The landlord must instruct a certificated enforcement agency. National firms specialise in this work; their fees are regulated by the Taking Control of Goods (Fees) Regulations 2014: the compliance stage fee is £75; the enforcement stage fee is £235 + 7.5% of the amount recovered above £1,500.
- The 7-day notice, taking control of goods, and insolvency restrictions: Procedure: (1) Instruct a certificated enforcement agent. (2) The enforcement agent serves a Notice of Enforcement on the tenant — stating the amount owed; the intention to take control of goods on a named date at least 7 clear days away; the address where the goods will be taken if seized. The notice must comply with Taking Control of Goods Regulations 2013 r.6. 7 days means 7 clear days — not counting the day of service or the day of enforcement. (3) If the tenant pays the full debt (including enforcement fees) before the 7 days expire: the CRAR process stops. (4) If not paid by the enforcement date: the enforcement agent attends the premises. Taking control of goods: the enforcement agent can take control of the tenant's goods (goods owned by the tenant on the premises) — they cannot seize the landlord's fixtures, fittings, or goods belonging to a third party (subject to the controlled goods procedure for disputed ownership). The enforcement agent can: (a) enter a Controlled Goods Agreement (CGA) with the tenant — leaving the goods on the premises under an agreement that they are under the control of the enforcement agent; the tenant can continue to use them but cannot dispose of them until the debt is paid. (b) Remove goods to storage. (5) If the debt remains unpaid after CGA or removal: the enforcement agent sells the goods at public auction, giving at least 7 days' notice of the sale. Insolvency restrictions — critical: (a) Company voluntary arrangement (CVA): moratorium under the CVA does not automatically prevent CRAR — legal advice required. (b) Administration: once a company is in administration (Insolvency Act 1986 Schedule B1 para.43), there is an automatic moratorium preventing CRAR without the permission of the administrator or the court. (c) Compulsory liquidation (winding-up order): once a winding-up order has been made, CRAR cannot be exercised — enforcement proceedings are stayed. (d) Voluntary liquidation: once a resolution to wind up has been passed, CRAR is stayed. Landlord's position in insolvency: commercial landlords should consider exercising CRAR (or the alternative of forfeiture of the lease, subject to insolvency moratorium considerations) as early as possible when a tenant is in financial difficulty — before insolvency moratoriums take effect. Scotland: there is no equivalent of CRAR in Scotland; commercial landlords must obtain a court decree for payment and enforce through summary diligence on a liquid document (a registered lease) or through attachment of goods (Debt Arrangement and Attachment (Scotland) Act 2002 — requires a court order). NI: the common law right of distress for commercial rent was abolished in NI by the Law Reform (Miscellaneous Provisions) (NI) Order 1981; there is no CRAR equivalent — commercial landlords in NI must issue court proceedings for a judgment debt and then enforce through the Enforcement of Judgments Office (EJO)
Frequently asked questions
Can I use CRAR to recover unpaid service charges from a commercial tenant?+
No — CRAR only covers the element of a tenant's payments that is reserved as 'rent' in the lease. Service charges, insurance premiums, administration fees, and other sums are not recoverable via CRAR unless the lease expressly reserves them as 'rent'. This means landlords should check the rent definition in the lease carefully before instructing an enforcement agent. If service charges are reserved as additional rent in the lease, they may qualify — but a specialist enforcement agent should confirm this based on the specific lease wording.
Can a landlord use CRAR for a property with a residential flat above a commercial unit?+
No — if any part of the premises demised under the lease is used as a dwelling, CRAR cannot be used for that lease. The entire premises must be used solely for commercial purposes. A landlord with a mixed shop/flat building should ensure the residential and commercial parts are let under separate leases (the shop under a commercial lease; the flat under an AST or occupation contract) — CRAR could then be used for the commercial element under its separate lease, but not for the residential flat.
What happens if my commercial tenant goes into administration while I am using CRAR?+
An administration moratorium (under Insolvency Act 1986 Schedule B1 para.43) prevents you from exercising CRAR without the consent of the administrator or the court. If the enforcement agent has already taken control of goods before administration begins, there may be arguments that CRAR is already exercised — but this is a contested area and specialist insolvency legal advice is essential immediately. In compulsory liquidation (winding-up order), CRAR is stayed entirely. Act quickly when a tenant shows signs of financial distress — CRAR and forfeiture (if available) should be considered before insolvency proceedings begin.
What is the minimum amount of rent arrears needed to use CRAR?+
The minimum net unpaid principal rent must be at least 7 days' worth of rent. This is calculated as: annual rent divided by 365, multiplied by 7. For example, a commercial property let at £52,000 per year requires at least £996 of outstanding principal rent before CRAR can be exercised. Service charges and other non-rent payments are excluded from this calculation. The 7-day minimum threshold means CRAR is not suitable for recovering very small amounts of arrears — a county court claim may be more appropriate.
- LTA 1954 — commercial tenancy security of tenure and s.25 notices →
- Managing rent arrears — residential arrears recovery strategy →
- County court judgment — obtaining and enforcing a CCJ for debt →
- Mixed-use property — residential and commercial in one building →
- Tenant insolvency — CVA, administration, liquidation and landlord rights →
- Forfeiture — re-entry and forfeiture of commercial leases →