CRAR and commercial forfeiture moratorium extended to 25 March 2022

At the beginning of the Coronavirus outbreak, temporary regulations were put in place to provide protection to tenants of commercial leases with rent arrears accumulated during the pandemic period. At this time, the Government encouraged commercial landlords and tenants to resolve rent arrears through negotiation or arbitration.

Earlier this month, on 16 June 2021, the Government announced a further extension to the moratorium on the Commercial Rent Arrears Recovery (CRAR) and forfeiture of a commercial lease until the 25 March 2022. It is thought that the Government's reason for the extension is to protect jobs and encourage businesses to continue to trade.

New CRAR regulations

Under the Coronavirus Act 2020, the amount of rent that now needs to be outstanding for a landlord to be able to enforce Commercial Rent Arrears Recovery (CRAR) has been extended from the usual 7 days’ rent as follows:

• between 25 December 2020 and 24 March 2021 - 366 days’ worth of rent has to be outstanding before a landlord can enforce CRAR

• between 25 March and 23 June 2021 CRAR - 457 days’ worth of rent is outstanding before a landlord can enforce CRAR

• between 24 June 2021 and 25 March 2022 - 554 days’ worth of rent is outstanding before a landlord can enforce CRAR

With consideration to the above, it is expected that landlords will be able to rely on the standard CRAR procedure from 26 March 2022.

How landlords can seek to recover rent arrears

To date, the Government has encouraged tenants to pay rent either in accordance with their lease or with the arrangements they have agreed with their landlord.

The Government plans legislation to be introduced in the current session of parliament, to provide resolution of rent arrears. This legislation will include a backstop: when negotiation is not successful, both parties will be required to undertake compulsory arbitration.

Other commercial rent arrears recovery options

An alternative option for CRAR is raising a claim for the arrears in the county court. Once a CCJ has been granted, you can then 'transfer up' the judgment to the High Court for enforcement under a writ of control.

The writ will be valid for 12 months and does mean that the enforcement agent may also take control of goods at other sites where the tenant operates, not just at the demised premises.

To find out more, call our Enforcement team a call on 01785 825 501 or email info@dukeslimited.co.uk