Landlords or property owners in the U.K. have the right to recover their financial loss from tenants who have consecutively failed to settle residential or commercial rent. Recovery laws, however, needed amending.
In some situations before, landlords could just barge into tenants’ establishment and seize their possessions with the help of bailiffs. Under the now-defunct distress ruling, enforcers could take care of the situation with delinquent tenants even without notification or a court order.
Three years ago, the government had come up with a refined ruling after the previous one faced criticism.
New Rules on Arrear Collection
Under the Commercial Rent Arrears Recovery (CRAR) enacted in 2014, landlords must make a written request instructing bailiffs to take the possessions of a tenant in arrears to settle unpaid rent.
However, unlike the criticised ruling, CRAR only applies to commercial establishments that have documented tenancies and those tenants who have breached their contracts. Some people believe CRAR gives delinquent tenants the opportunity to move their possessions away to prevent the landlord from seizing them.
Alternative Ways to Recover Rent
The government has enacted CRAR after claiming that the previous ruling is a clear human rights violation. Under the new ruling, bailiffs could only go to the tenants’ premises at certain hours of the day.
Only then can they have tenants sign the Controlled Goods Agreement to allow possession or goods liquidation after seven days. In some situations, landlords could also recover their loss by utilising the tenant’s rent deposit or collect from the undertenant of tenants who have failed to settle their dues.
CRAR is the new ruling for landlords for them to possibly recover their financial loss from tenants who have been in arrears. Such ruling is slightly different from the distressed ruling where landlords can forcibly seize possessions of tenants.