Commercial Rent Arrears Recovery: Notice, Seizure, and Fees

Commercial Rent Arrears Recovery, known as CRAR, allows a landlord of purely commercial premises in England and Wales to instruct a certificated enforcement agent to seize a tenant’s goods for unpaid rent without first obtaining a court order. The procedure is set out in Part 3, Chapter 2 of the Tribunals, Courts and Enforcement Act 2007 and the Taking Control of Goods Regulations 2013.¹ It is a self-help remedy, but a tightly regulated one: every step carries strict rules about who can act, what qualifies as rent, and which goods are off-limits.

When CRAR Applies

CRAR is available only where there is a written lease and the premises are used entirely for commercial purposes. If any part of the demised property is let, occupied, or sub-let as a dwelling, the landlord cannot use CRAR and must bring a court claim instead.¹ A flat above a shop takes the whole building outside the procedure. Informal residential use, such as a business owner sleeping on-site, can defeat CRAR if it emerges during a challenge.

The debt also has to be the right kind of debt. The Act treats “rent” narrowly: the principal sum payable for possession and use of the premises, plus any contractual interest and VAT on those sums.¹ Service charges, insurance contributions, repair costs, rates, and council tax are excluded even when the lease rolls them into a single payment labelled “rent.” If the unpaid invoices are only for those ancillary items, CRAR is not available.

There is a minimum amount, too. The net unpaid rent must equal at least seven days’ rent at two separate moments: immediately before the notice of enforcement is served, and immediately before the enforcement agent first takes control of goods.² A partial payment that drops the balance below the threshold at either checkpoint stops enforcement.

The Notice of Enforcement

Before anyone attends the premises, the landlord or their agent must prepare and serve a formal notice of enforcement. It identifies the tenant, the premises, the sum owed, and the rental period covered, and it should break the debt into principal rent, interest, and VAT so the tenant can see exactly what is being claimed. Figures must match the rent ledger. Errors can invalidate the whole procedure.

At least seven clear days must then pass before an enforcement agent can attend. Clear days exclude the day the notice is served, the day enforcement begins, Sundays, bank holidays, Good Friday, and Christmas Day.³ The waiting period is the tenant’s final chance to pay in full or agree a repayment plan, and in practice many debts settle at this point. It is also the cheapest stage for both sides to resolve things.

Taking Control of Goods

Only a certificated enforcement agent may take control of goods and sell them. A judge certifies the agent under section 64 of the 2007 Act, after being satisfied that the applicant is a fit and proper person with sufficient knowledge of the law and procedure and the required security bond in place.⁴ An uncertificated person has no legal authority to seize goods, and a tenant can ask to see proof of identity and authority before letting anyone in.⁵

Agents may enter and take control of goods only between 6:00 a.m. and 9:00 p.m. on any day other than a Sunday, Good Friday, or Christmas Day. A court can authorise attendance outside those hours in exceptional circumstances.⁵

Schedule 12 of the 2007 Act sets out four permitted methods for taking control of a tenant’s goods:⁵

Securing goods on the premises, for example by clamping a vehicle in the car park.
Securing goods on a highway if items are found on a public road, or within a reasonable distance.
Removing goods to storage until the debt is resolved.
Entering into a controlled goods agreement: a written agreement in which the tenant acknowledges the agent’s legal control over specified items while keeping them on the premises, and promises not to remove, sell, or dispose of them until the debt is paid.

The controlled goods agreement is by far the most common outcome. It lets the business keep operating while giving the landlord security over the goods. If the tenant breaks the agreement by moving or disposing of items, the agent can re-enter and remove them for sale.

Entry rules differ between visits. On the first visit, the agent must gain entry by peaceable means: through an open door, or by being let in. Forcing a door or breaking a lock is not permitted.⁵ On later visits, particularly where goods have already been taken under control, the rules on re-entry are less restrictive. Locking out an agent after the first visit does not stop the process.

Goods That Cannot Be Seized

The Taking Control of Goods Regulations 2013 protect several categories of goods from seizure:

Tools of the trade: equipment the tenant personally needs for their work, including computers, vehicles, telephones, and specialised tools, up to a combined value of £1,350.⁶
Basic domestic necessities where anyone lives on or near the premises, including beds, a cooker, a refrigerator, a washing machine, and medical equipment.⁶
Vehicles displaying a disabled person’s badge, if reasonably believed to be used for carrying a disabled person.
Emergency vehicles used for police, fire, ambulance, or health emergency purposes.
Assistance dogs and domestic pets, including guide dogs, hearing dogs, sheep dogs, and guard dogs.

The £1,350 tools-of-the-trade cap is an aggregate, not a per-item figure. If a tenant’s essential work equipment exceeds that value, the agent can take control of items above the threshold. For a modestly equipped business the protection can cover most of what matters; for capital-intensive operations it is a thin shield.

Third-party property is also off-limits. An agent can only take control of goods belonging to the tenant named in the notice. Items owned by a sub-tenant, held under a hire-purchase agreement, or belonging to someone who has stored goods on the premises should not be seized. A third party who believes their property has been wrongly taken must make a written claim to the enforcement agent, typically within seven days of removal, identifying themselves and the goods. If the claim is disputed, the court decides ownership before any sale.

Selling the Goods

If the debt remains unpaid after goods have been taken under control, the agent moves towards a sale. Two timing rules apply. At least seven clear days must pass between the day the agent took control of the goods and the day of sale, and the agent must give the tenant at least seven clear days’ written notice specifying the date, time, and place.⁷ The sale may be by public auction or private treaty.

The tenant can redeem the goods at any point before the sale by paying the full outstanding rent plus all enforcement costs incurred to that stage. After the sale, proceeds are applied first to the arrears and enforcement fees, and any surplus must be returned to the tenant.

Fees the Tenant Will Pay

Enforcement agent fees are fixed by regulation, not negotiated, and they come in three stages. Each stage only becomes payable when the enforcement reaches it.

Compliance stage: a fixed fee of £75, payable when the notice of enforcement is issued.
Enforcement stage: a fixed fee of £235, plus 7.5% of the debt exceeding £1,500, payable only when the agent actually visits the premises.
Sale stage: a fixed fee of £110, plus 7.5% of the debt exceeding £1,500, payable only if goods are removed and preparations for sale begin.

The percentage element adds up on larger debts. On £10,000 of arrears, the enforcement stage fee alone would be £235 plus £637.50 (7.5% of £8,500), totalling £872.50. The tenant bears these costs on top of the rent owed, so settling at the compliance stage saves the most money.

Situations That Block CRAR

Some circumstances stop CRAR even when the basic eligibility rules are met. If the tenant company enters administration, a statutory moratorium kicks in immediately: no legal process, including CRAR, may be started or continued without the administrator’s consent or the court’s permission.⁸ Even filing a notice of intention to appoint administrators triggers that protection. A landlord who ignores the moratorium risks having the enforcement set aside and facing a damages claim. Where a tenant is already in financial distress, the practical window for CRAR is often narrower than landlords expect.

Residential occupation of any part of the premises, as noted above, is another complete bar. And where the unpaid sums are only service charges, insurance premiums, or other ancillary costs, CRAR does not apply no matter what the lease calls those payments: the debt must be rent as defined in section 76 of the Act.¹

Other Remedies for Unpaid Rent

CRAR is one of several tools available to a commercial landlord chasing arrears, and each has different advantages and risks.

Forfeiture of the lease: the landlord terminates the lease and retakes possession, either by peaceable re-entry when the premises are unoccupied or through court proceedings. Forfeiture recovers the property rather than the money, and the tenant may apply for relief from forfeiture to reinstate the lease.
Court proceedings for debt: a straightforward claim resulting in a judgment that can be enforced through a writ of control or other execution methods. Slower than CRAR, but it captures ancillary charges that CRAR cannot touch.
Drawing down a rent deposit: if the lease includes a rent deposit deed, the landlord can typically draw on the deposit, subject to the terms of the deed.
Statutory demand or winding-up petition: for debts exceeding £750, a statutory demand can pressure a company tenant to pay. If the demand goes unsatisfied for 21 days, the landlord may petition to wind up the company. A heavy-handed option, best reserved for tenants who can pay but refuse to.

Landlords sometimes combine remedies, for example forfeiting the lease while pursuing a court claim for arrears accrued before forfeiture. The right approach depends on whether the priority is recovering money, recovering the property, or both. CRAR works best when the tenant has valuable goods on the premises and the landlord wants to keep the lease alive while recovering what is owed.

1
Legislation.gov.uk. Tribunals, Courts and Enforcement Act 2007 – Commercial Rent Arrears Recovery
2
Legislation.gov.uk. The Taking Control of Goods Regulations 2013 – Part 7
3
Legislation.gov.uk. The Taking Control of Goods Regulations 2013 – Part 2
4
Legislation.gov.uk. The Certification of Enforcement Agents Regulations 2014
5
Legislation.gov.uk. Tribunals, Courts and Enforcement Act 2007 – Schedule 12
6
Legislation.gov.uk. The Taking Control of Goods Regulations 2013 – Exempt Goods
7
Legislation.gov.uk. The Taking Control of Goods Regulations 2013
8
Legislation.gov.uk. Insolvency Act 1986 – Schedule B1, Paragraph 43