CRAR Creeps Closer

    October 2013

    After years of waiting, it is widely anticipated that in April next year, the ancient remedy of distress will be abolished and the new Commercial Rent Arrears Recovery regime (CRAR) will come into effect. This has been on the statute books since 2007, but its implementation recently took a big step forward with the passing of the Taking Control of Goods Regulations 2013 (the regulations), which provide much of the “flesh” that has been missing from the statutory skeleton laid out in the Tribunal Courts & Enforcement Act 2007 (TCEA 2007).

    Key points of the article:

    • The right of distress is expected to be abolished in April next year and replaced by an entirely new statutory regime, called Commercial Rent Arrears Recovery (CRAR).
    • CRAR will oblige a landlord to give seven clear days’ notice to a tenant before exercising the right of CRAR, prompting concerns that the new regime will be less effective and tenants will be more likely to remove assets during the notice period.
    • Landlords of shops, pubs, hotels and other establishments where people have living accommodation on site may lose their right to exercise CRAR because of the residential element.
    • Insolvency practitioners need to be aware of the new regime and how it interacts with the available insolvency processes.

    *This article was published in March 2013 and is reproduced with the permission of the Corporate Rescue and Insolvency Journal.