The moratorium restricting a landlord’s ability to recover commercial rent arrears from a business tenant has now ended.
Commercial rent arrears recovery (CRAR) is the method of enforcement to recover rent arrears, it only applies to principal rent, VAT and interest. CRAR allows an enforcement agent to take control of a tenant’s goods and sell them to recover arrears. Applicable only to commercial premises as opposed to mixed-use premises CRAR also specifies the method of sale of the goods seized.
Marston Recovery work hard to deepen our relationship with our clients and partners to support their evolving needs, as well as the needs of the customers they serve. As part of this commitment, we are pleased to announce The Commercial Rent Bill has now received Royal Assent and is the Commercial Rent (Coronavirus) Act 2022. The previous CRAR measures are replaced by new restrictions contained in the Commercial Rent (Coronavirus) Act 2022, which came into force on 24 March 2022.
Please find official notice linked here.
While the moratorium on CRAR has now expired, there are protections for businesses that meet the main criteria i.e.
• The tenant’s business must have been “adversely affected by coronavirus”. This means that the business must have been subjected to a legally enforceable closure requirement between 21 March 2020 and 18 July 2021 (in England) or 7 August 2021 (in Wales).
• The arrears must have been accrued within the “protected period“ that ran from 21 March 2020 and ends with the last day that the business was subject to a closure requirement or a specific coronavirus restriction. Specific coronavirus restrictions include any government regulations controlling how a business could operate.
A summary of the ringfenced periods and the businesses affected can be found in Annex A on the government website, here.
For example, for a clothing shop in England the ring-fenced period ran from 21 March 2020 to 12 April 2021 (when non-essential retail was allowed to re-open); and for a café in England the ring-fenced period ran from 21 March 2020 to 18 July 2021 (when restrictions ended on table booking size and requirement for customers to eat while seated).
Existing forfeiture and recovery restrictions
Landlords are once again to have entitlement to forfeit commercial leases by peaceable re-entry for non-payment of rent for arrears that fall outside the Ringfenced Period relevant to their business sector if they have not expressly waived the right to do so. This includes sums which fell due prior to 21 March 2020 and remain outstanding.
Next steps
Marston Recovery recognise the challenges on whether your debt is applicable to the Act. If you wish to discuss further, please get in touch with a member of our Marston Recovery team to ensure that you are best prepared.
