After some eighteen months since The Taking Control of Goods (Amendment)(Coronavirus) Regulations 2020 came into force on 29 September 2020, the moratorium on CRAR is lifted this Friday 25 March 2022 in the Commercial Rent (Coronavirus) Act 2022 (the “Act”).
In June 2020, emergency legislation came into force in order to protect commercial tenants during the financial uncertainties brought about by the pandemic. The Government thinking was that the new legislation would not only protect businesses from insolvency but also redundancies of staff, ensuring a positive outcome to rent arrears in this period. On 29 September 2020 further extensions to these emergency legislations came into force.
As we begin to see a return to life as we knew before Covid-19, many landlords, collections agencies and creditors are awaiting news of what will happen next.
What is Commercial Rent Arrears Recovery (CRAR)?
CRAR is a statutory procedure that allows commercial landlords to recover outstanding rent from a commercial tenant by seizing, removing, and selling goods.
The Commercial Rent (Coronavirus) Act 2022: CRAR post-25th March 2022
Expected to receive Royal Assent later today, The Commercial Rent (Coronavirus) Act 2022 will define a new arbitration procedure for rent arrears provided for “protected rent debt” (money that would have been paid under normal circumstances during the tenancy, but was during a period when the business was subject to a closure requirement/specific restriction between 21 March 2020 and 18 July 2021).
The Act explains that where there is a dispute between a tenant and a landlord of a business tenancy over relief from payment of a protected rent debt, either the tenant or the landlord is entitled to make a reference to arbitration within the period of six months from the date that the Act comes into force. This period will be extendable by statutory instrument.
This will prevent commercial landlords from using typical enforcement solutions from recovering protected rent debt for 6 months (25th September 2022) or until the arbitration process is concluded.
The new procedures outlined in the act will not apply to the following scenarios outside of the "protected rent debt" period:
- outstanding rent incurred before March 2020
- outstanding rent incurred since the 18th of July 2021
- for premises not required to close by the Government’s Coronavirus restrictions.
In summary, the Act will impact on the following eventualities:
- arrears are protected by the Act if accrued during a period of compulsory closure due to Government’s Coronavirus restrictions;
- if a tenant was not subject to any compulsory closures (i.e. essential retailers) the Act plays no part in resolving any outstanding arrears.
Instruct Equivo for Commercial Rent Debt Recovery (CRAR)
At Equivo, we can recover commercial rent arrears under CRAR and provide full national coverage with dedicated enforcement agents throughout England and Wales. This service is provided at no extra cost to the landlord – the tenant will pay legal fees and those of our Certificated Enforcement Agents.
Your main contact:
Jonathan is Managing Director of Enforcement Services which he leads from our Central London offices.