How Does the CRAR Process Work? A Landlord’s Guide 

A commercial tenant who stops paying rent is a dilemma. You want the money back as soon as possible, but often you want to keep the tenant in place. That’s the job Commercial Rent Arrears Recovery was built for.

Commercial Rent Arrears Recovery (CRAR) lets a commercial landlord in England and Wales recover unpaid rent through a certificated enforcement agent, without going to court. The agent serves at least 14 clear days’ notice, then attends the premises to take control of the tenant’s goods and sell them if the rent stays unpaid.

Enforced well, CRAR recovers the money in a matter of days. Used carelessly, it can cost a landlord the right to forfeit the lease for those same arrears.

In this post I’ll guide you through how the CRAR process works.

What is CRAR, and when can a landlord use it?

CRAR is a statutory procedure in England and Wales that lets a commercial landlord recover unpaid rent by taking control of a tenant’s goods and selling them. Short for commercial rent arrears recovery, it replaced the old common law right of distress for rent on 6 April 2014 and needs no court order.

The power sits in the Tribunals, Courts and Enforcement Act 2007 and runs through the Schedule 12 ‘taking control of goods’ procedure, with the detail filled in by the Taking Control of Goods Regulations 2013. Only a certificated enforcement agent can exercise it.

When can I use CRAR?

Three things have to be true before you can use CRAR: 

1. The lease has to be of commercial premises.
2. It has to be in writing.
3. A minimum amount of rent has to be overdue.

Below I will explain in more details how to know if your premises qualify, and how much rent has to be overdue. 

Which premises qualify, and which don’t?

CRAR applies only where the premises are let and used wholly for business. The test is whether any part is used as a dwelling, not whether a residential part is present – a shop with a flat above it still qualifies if the lease lets the flat purely as a storeroom or office.

That distinction matters more than it looks: a lease of a shop and flat is not a lease of commercial premises if the flat is used, or required by the lease to be used, as a dwelling. But where the lease sets no residential use and the tenant uses the flat for the business, the lease stays commercial and CRAR is available. A tenant also cannot defeat CRAR by putting someone into residence in breach of the lease – occupation that breaks the lease, or a superior lease, does not count.

Where premises genuinely don’t qualify, CRAR is off the table. We run those as commercial debt recovery instead, which means issuing a debt notice first, but ultimately could lead to getting a court order for the purpose of enforcement by Enforcement Agents.

How much rent must be owed before CRAR can be used?

A landlord can use CRAR once the net unpaid rent reaches an amount equal to seven days’ rent. Net unpaid rent is the rent owed for possession and use of the premises after the interest and VAT elements are stripped out.

Seven days’ rent is the threshold under regulation 52 of the 2013 Regulations. During the pandemic a far higher temporary threshold of 554 days’ rent applied, running until 25 March 2022. That temporary period has passed and the practical point for a landlord today is the ordinary seven-day rule: the arrears have to clear it both when notice is served and when goods are first taken into control.

What are the stages of the CRAR process?

CRAR runs through four stages: 

1. Instructing a certificated enforcement agent
2. Serving a notice of enforcement
3. A compliance period for the tenant to pay or agree a plan
4. An enforcement visit to take control of goods. 

Most cases settle during the compliance period, before any visit takes place.

The notice of enforcement begins the process. It has to be in writing and set out: 

• The debt
• The enforcement power
• How and when to pay
• Contact details
• Deadline that paying by prevents goods being taken
• Where to get free debt advice.

It can be served by post, electronically, through the letterbox, in person or at a company’s registered office.

During the notice period, a tenant will sometimes make contact or offer a payment plan. We always go back to the landlord for permission before agreeing to anything. Where there is no contact at all, the agent attends as soon as the period expires – day 15.

Here’s another recap on the stages:

1. The landlord instructs a certificated enforcement agent in writing and authorises them to act.
2. The agent serves a notice of enforcement setting out the debt and the deadline to pay.
3. The tenant pays, agrees to a payment plan or does nothing during the notice period.
4. If the debt is unpaid, the agent attends the premises to take control of goods.

What is a Controlled Goods Agreement?

A controlled goods agreement is an arrangement where the tenant keeps their goods on site and pays the debt off under an agreed plan. The goods stay where they are, but the agent can return and remove them if the tenant falls behind on the payments.

In practice this is the middle path between paying in full on the day and losing goods to auction. Where a payment plan is agreed, the tenant signs the agreement, the goods remain on the premises under it and the debt is cleared over the agreed period.

How much notice must a tenant get before enforcement agents attend?

A tenant must be given at least 14 clear days’ notice of enforcement before an agent can take control of goods. This increased from seven clear days on 1 May 2026. The count excludes Sundays, bank holidays, Good Friday and Christmas Day.

The rule sits in regulation 6 of the Taking Control of Goods Regulations 2013, which applies to all Schedule 12 enforcement – so it covers CRAR, and there is no separate CRAR notice period for the tenant. An agent cannot take control of goods at all unless notice has been given; we serve 14 clear days. The only way to shorten it is a court order and a court will only grant one where it is satisfied the goods would otherwise be moved or disposed of to dodge enforcement.

How are clear days counted?

The counting rule is where landlords trip up, because ‘clear days’ is not the same as calendar days.

1. The period begins the day after the notice of enforcement is given. The day the notice is given is not counted.
2. Each following day counts as one, except Sundays, bank holidays, Good Friday and Christmas Day, which are not counted at all.
3. The day the enforcement agent takes control of goods is not counted either, because the end of the period is defined by that event.
4. The agent may attend once fourteen counted days have passed.

Formula: fourteen counted days = the calendar days following the notice, excluding Sundays, bank holidays, Good Friday and Christmas Day.

What can and can’t be recovered through CRAR?

CRAR recovers principal rent, plus any interest and VAT on that rent. It cannot recover service charges, insurance, rates, repairs or maintenance – even where the lease reserves those sums as rent. Those have to be pursued as a separate debt instead.

‘Rent’ here has a precise meaning: the amount payable under the lease for possession and use of the premises, plus lease interest and VAT on it – everything else is out. Rates, council tax, services, repairs, maintenance and insurance are excluded whether or not the lease calls them rent – the label in the lease makes no difference.

As such, a service charge reserved as rent still has to go through debt recovery; it cannot ride along on CRAR. Where the rent is wrapped up in a single inclusive figure, only the part reasonably attributable to possession and use counts, and the rent must have fallen due before the notice and be calculable with certainty.

What happens when enforcement agents take control of goods?

When an enforcement agent takes control of goods, they enter the premises during business hours, identify goods belonging to the tenant and value them up to the amount owed plus the costs of enforcement and sale. The goods are usually secured on site under a controlled goods agreement rather than removed.

We go in during business hours for a simple reason – we need to be able to walk in through the door. An agent can only enter by a door or another usual means of entry, such as a loading bay, and cannot use force against anyone. 

The job is called ‘taking control of goods’ now. Before 2014 it was called ‘seizure’, and the change in name came with much tighter rules on what can be taken and how.

What can an agent take, and what are the limits?

An agent can take control of the tenant’s goods up to the value of the debt plus the costs of enforcement and sale. They cannot take goods worth far more than that – a £200,000 work vehicle for a £10,000 debt – unless there is nothing of lower value available to cover the sum.

The law caps it at the amount outstanding plus an allowance for future costs. Higher-value goods can only be taken to the extent necessary, and only where there aren’t enough lower-value goods within a reasonable distance, and only where their value is or ought to be clear to the agent. 

Where a valuation is obtained rather than made on the spot, it has to come from a qualified, independent valuer, in writing, with a copy to the tenant and any co-owner. In honesty, that part is awkward: we are expected to act as valuers without being valuers, and most goods are worth a fraction of what the tenant thinks once they reach a saleroom.

How often do CRAR cases end at auction?

At Strikes, around 99% of cases end with the tenant paying on the day we attend or agreeing a payment plan. We have handled over 5,000 CRAR instructions since 2014 and currently take on about 500 a year. In that whole time, goods have been removed and sold on only three occasions.

The threat of removal is what makes a tenant pay; the removal itself is rare and nobody actually wants it. If goods are sold, the law requires the best price that can reasonably be obtained, sale by public auction unless a court orders otherwise, seven clear days’ notice of the sale and a qualified auctioneer or an independent online provider. 

Here’s what the value limit looks like against real stock:

Does using CRAR give up the right to forfeit the lease?

Using CRAR affirms that the lease is continuing, so it gives up the right to forfeit the lease for those same arrears. A landlord who wants both the money and the unit back has to choose before anything is instructed, because recovering the rent closes off forfeiture for that rent.

The Act itself says nothing about waiver, which means the common law decides it. The Court of Appeal in Brar v Thirunavukkrasu held that exercising CRAR in principle amounts to an unequivocal act confirming the landlord’s decision to affirm that the lease continues. In plain terms, CRAR is for a lease you want to keep – it is the landlord giving a paying tenant a firm push, not a way out of the tenancy.

So we tell landlords this at the instruction stage: if a landlord wants the unit back as well as the money, we won’t run CRAR. We advise how commercial lease forfeiture works as the route that fits instead. 

You cannot recover and forfeit for the same rent period – what I call a ‘double action’ – so a landlord who has exercised CRAR has to wait until the next quarter day before a fresh forfeiture question can arise.

When can CRAR not be used?

CRAR cannot be used in a handful of situations, most commonly where the premises are not wholly commercial, where the lease has already ended by forfeiture or where the tenant is insolvent. Each has a different route to recovery.

While the above situations are the most common, they don’t cover every scenario I’ve seen. CRAR cannot be used in the following cases:

• The premises are not wholly commercial – any part used as a dwelling takes the lease outside CRAR.
• There is no written lease – an occupier under a licence rather than a lease is outside CRAR.
• The lease has already ended by forfeiture.
• The arrears are below the seven-day minimum amount.
• The tenant is insolvent.

Wanting the unit back as well isn’t a bar to CRAR. It’s a decision you need to make before you instruct anyone, because using CRAR confirms the lease is continuing and closes off forfeiture for those arrears. You can’t do both for the same rent period – if the tenant still hasn’t paid after we’ve attended, you’d be waiting until the next quarter date to forfeit.

So the question I always ask is this: if the tenant pays what they owe, are you happy for them to stay? If the answer’s yes, CRAR is the right tool. If it’s no, don’t start with CRAR – forfeiture is the route, and we handle that too.

How far back can rent arrears be recovered?

The CRAR rules set a specific one-year limit only for agricultural holdings, where rent that became due more than a year before the notice cannot be recovered. For ordinary commercial premises the practical limit is what landlords actually do, and in our experience the arrears are rarely older than a year.

The oldest we have ever handled is about a year, perhaps eighteen months at a push. No landlord leaves it longer than that, because the rent is their business – you would be on the phone long before 500 days had passed. So, while the age of the arrears is worth checking at the outset, it’s seldom the thing that stops a job going ahead.

What happens if the tenant enters administration?

When a tenant enters administration, a statutory moratorium limits what creditors can do. No legal process may be started or continued against the company except with the administrator’s consent or the permission of the court. That is not an outright ban, and whether CRAR falls within it turns on how the provisions connect.

The chain is worth seeing in full. 

The Insolvency Act 1986 says no legal process – including distress – may be instituted or continued against a company in administration except with the administrator’s consent or the court’s permission. The same Act defines ‘distress’ to include use of the Schedule 12 procedure, though that definition applies “except in so far as the context otherwise requires”; CRAR is use of the Schedule 12 procedure.

No reported case has settled whether CRAR is caught by the administration moratorium, so the reader can follow the provisions and see where they lead without being told the answer. Our own position is straightforward: we do not pursue CRAR against a company in administration, and we recommend a different form of enforcement instead.

Frequently asked questions

Does CRAR still exist?

Yes, CRAR came into force on 6 April 2014, replacing the old common law right of distress for rent, and it remains the statutory route for recovering commercial rent arrears in England and Wales. It has been amended over the years – most recently on the notice period – but the remedy itself is very much in use.

Can a landlord carry out CRAR themselves?

No, only a certificated enforcement agent can exercise CRAR. The landlord’s role is to authorise the agent in writing, giving the details the authorisation has to contain; a landlord cannot serve the notice, attend the premises or take control of goods personally, and using anyone other than a certificated agent puts the whole process at risk.

Does CRAR need a court order?

No court order is needed to use CRAR itself – that is much of its appeal over going to court. The court only comes into it in narrow situations, such as shortening the notice period or varying how goods are sold. Where premises don’t qualify for CRAR, though, recovery shifts to debt recovery, and that does need a judgment.

Thinking about recovering commercial rent arrears?

When a commercial tenant falls behind, the route you pick first closes off the others. Exercising CRAR affirms that the lease continues, and the right to forfeit for those arrears goes with it – so the choice between recovering the money and recovering the unit has to be made before anything is instructed, not after.

We handle around 500 CRAR instructions a year and have run over 5,000 since the regime began. Talk to us before you commit to a route, and we will tell you which one fits your situation – including the times when the honest answer is that CRAR is the wrong tool for the job.

• Over 5,000 CRAR instructions handled
• Free credit report on limited company tenants
• Usually no cost to the landlord, depending on the details
• England and Wales coverage

Get in touch to instruct us, or to ask any questions you have.