Distress is a right in common law that allows landlords to recover arrears in rent by seizing their tenant’s property. This was the legal way of landlords recovering rent arrears before Commercial Rent Arrears Recovery (CRAR) came into force in 2014. While distress and CRAR have some similarities, there are also some significant differences between them.
CRAR is, for instance, more restrictive than distress, and only certified enforcement agents authorised by the landlord can carry it out. Hiring a private bailiff service to enforce a CRAR is the best option for rent arrears recovery. Here are the other differences between distress and CRAR.
Type of Property Used
Landlords use distress to recover rent arrears for virtually any kind of property. CRAR, on the other hand, is for properties entirely leased for commercial use. It is not enforceable for residential and mixed-use leases, unless the contract deems use of the property for residential purposes unauthorised.
Total Sum That Landlords Can Recover
CRAR is only used for recovery of rent for use and possession together with any interest and VAT due on the rent. Unlike distress, landlords cannot use CRAR in recovering other overdue sums from their tenants. These would include insurance premiums and service charges, even if you reserved these in your lease as rent.
Rules of Giving Notice
Distress required no notice to the tenant before seizing property for rent arrears. CRAR requires landlords to serve the tenant with a notice of enforcement at least seven clear days before taking any goods. The court can reduce this period if there is a risk of the tenant to remove valuable assets before the seven days.
There are particular goods that landlords cannot seize under the CRAR process. These include tools of your tenant’s trade with a worth of up to 1350 pounds and items used to satisfy a tenant’s necessary domestic needs. Things owned by a third party are also exempt from possession under CRAR.