Service: Other 

Sector: Property 

Forfeiture and Commercial Rent Arrears Recovery (CRAR) are now banned until 25 March 2022

By Richard Kleiner

15 Jul 2021

Forfeiture and Commercial Rent Arrears Recovery (“CRAR”)  are banned now until 25 March 2022. CRAR can still be used for arrears that fell due before 25 March 2020.

Statutory demands will come back on 30 September 2021. However, they will only be available for rent that falls due from 29 September 2021 onwards.

The Covid quarters, March 2020 to June 2021 inclusive are being put in their own box. Payment of part of all of these arrears and the timings of such payments should be agreed upon between landlord and tenant. The usual methods of recovery will never be available for these quarters. If the landlord and tenant can’t agree on a payment plan for these arrears then they will be referred to a special and new arbitration procedure. The rules have not yet been published for this procedure and I doubt we’ll see them now until September.

Needless to say, there’s lots of discussion as to what form they’ll take, for example:

  1. Will they include service charge and insurance that fell due during that period,
  2. Will it be a subjective procedure for landlord and tenant requiring expert evidence perhaps as to the ability of that particular tenant to pay,
  3. Will it be an objective procedure e.g. the premises were closed for X/Y days so the proportion the tenant has to pay is Z.
  4. Will the arbitrator have the ability to order payment of determined arrears over a period of time etc.

It will clearly be some time before we know the answers to these questions. However, our advice in the meantime, if you can, is to agree on repayment terms with your landlord that work for both parties to avoid uncertainty going forwards and provide some stability for both parties during these weird times.

If you require any further advice, please get in touch with your usual Gerald Edelman contact or email us at hello@geraldedelman.com

For more information, see the government update here.

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