CRAR, or Commercial Rent Arrears Recovery, is the legal process that lets a commercial landlord instruct an enforcement agent to seize and sell a tenant's goods to recover unpaid rent, without going to court first. It only applies to purely commercial leases, and it can only be used once strict conditions on arrears, notice and timing are met.
For a director, a CRAR notice follows a set procedure with fixed timeframes. There is usually a short window to act before an enforcement agent can enter the premises.
What CRAR is and when a landlord can use it
Commercial rent arrears recovery replaced the old common law right of "distress for rent" in April 2014, under Part 3 of the Tribunals, Courts and Enforcement Act 2007. It gives a landlord a statutory route to recover unpaid rent by instructing a certificated enforcement agent to take control of goods and sell them, as set out in official gov.uk guidance on Commercial Rent Arrears Recovery.
CRAR is only available where:
- The lease is in writing and relates wholly to commercial premises.
- There is no residential element to the letting (mixed-use premises are excluded).
- The tenancy has not ended, or the landlord is entitled to re-enter under the lease.
- A minimum level of net arrears is owed at the relevant times.
It cannot be used against residential tenants, and a landlord cannot pick and choose CRAR for part of a mixed commercial and residential building.
The conditions that must be met first
Before an enforcement agent can act, the landlord must be owed a minimum amount of unpaid net rent equivalent to at least seven days' rent. This threshold must be met both when the enforcement notice is given and again on the day goods are taken.
"Net rent" for CRAR purposes means pure rent reserved under the lease. It does not usually include:
- VAT charged on the rent, unless the lease itself reserves VAT as rent.
- Service charges, insurance rent or other sums, unless expressly reserved as rent.
- Interest or administration charges added after the arrears arose.
If the genuine rent arrears fall below the minimum threshold at either checkpoint, CRAR cannot proceed and the landlord must look at other remedies.
The enforcement notice and the seven-day period
A landlord using CRAR must first serve a formal enforcement notice on the tenant company. This notice must give at least seven clear days before an enforcement agent can attend to take control of goods.
Clear days exclude the day the notice is given, Sundays, bank holidays, Good Friday and Christmas Day, so the real gap is often slightly longer than a calendar week.
The notice must set out:
- The amount of rent arrears claimed to be outstanding.
- The date by which the tenant needs to pay to avoid enforcement.
- That an enforcement agent may attend the premises after that date.
This notice period is the director's main opportunity to pay, negotiate, or take advice before goods are at risk.
What goods can and can't be taken
An enforcement agent acting under CRAR can take control of goods belonging to the tenant company found at the premises. Once "controlled", those goods can eventually be removed and sold to recover the debt.
Certain items are protected and cannot be taken, including:
- Items necessary for the tenant's personal use, such as basic tools of trade below a set value.
- Goods that do not belong to the tenant, for example equipment on hire, lease or finance agreement where ownership sits with a third party.
- Perishable goods, and items already subject to another party's legal lien.
- Items already under an existing controlled goods agreement with another enforcement agent.
Enforcement agents must follow strict rules on how and when they can enter, set out in the Taking Control of Goods Regulations 2013.
How CRAR differs from forfeiture and CCJ enforcement
Directors often confuse CRAR with other landlord remedies.
- CRAR targets goods at the premises to recover rent arrears specifically. It does not end the lease, and the tenant can usually remain in occupation.
- Forfeiture (peaceable re-entry or court action) ends the lease itself, locking the tenant out of the premises entirely. Landlords sometimes use forfeiture instead of, or alongside, other remedies — see Can My Landlord Forfeit the Lease for Arrears? for how that process works.
- CCJ enforcement (a warrant or writ of control) requires the landlord to first obtain a County Court Judgment for the debt, then apply separately to enforce it. CRAR needs no court judgment at all — that is precisely why it is used so often for rent.
Because CRAR bypasses the courts, it can move faster than a CCJ claim, which is why a notice can arrive sooner than directors expect once arrears build up.
How to respond to a CRAR notice
Receiving a CRAR enforcement notice is a signal to act within days, not weeks. Sensible first steps include:
- Check the figures. Confirm the arrears claimed are accurate and genuinely rent, not disputed service charges or other sums.
- Contact the landlord or their agent promptly to discuss payment, a payment plan, or any dispute over the sum claimed.
- Review cashflow honestly. If arrears are one symptom of a wider cash squeeze, our guide to a business cashflow crisis sets out how to take stock quickly.
- Understand your wider options. Rent arrears rarely arrive without other pressures — see Commercial Rent Arrears: A Director's Options for a fuller picture.
- Speak to a regulated specialist early, so the options are understood before an enforcement agent attends.
Once goods are formally controlled, options narrow. A tenant may be offered a controlled goods agreement, letting the business keep using the goods while agreeing a repayment schedule — a serious commitment, not a routine formality.
Frequently asked questions
What is the minimum arrears amount for CRAR?
The landlord must be owed net unpaid rent equal to at least seven days' rent, both when the enforcement notice is given and when goods are taken. Below this level, CRAR cannot be used.
Does CRAR cover VAT and service charges?
Generally no. CRAR applies to pure rent reserved under the lease. VAT and service charges are usually excluded unless the lease specifically reserves them as rent, so it is worth checking the lease wording carefully.
What is a controlled goods agreement?
It is an agreement between the tenant and the enforcement agent allowing the tenant to keep using goods that have been formally controlled, in exchange for a commitment to pay the debt and not remove or sell those goods.
Can CRAR be used on a residential property?
No. CRAR only applies to premises let entirely for commercial purposes. It cannot be used against residential tenancies or mixed-use lettings with a residential element.
Can I stop enforcement once the notice has been served?
Paying the arrears in full, or reaching an agreed payment arrangement with the landlord before the notice period ends, are the usual ways to prevent an enforcement agent attending. Disputed arrears should be raised with the landlord immediately.
This article is general information only and is not legal, financial or insolvency advice. Every lease and every set of arrears is different, and directors should speak to a regulated specialist about their own circumstances.
If a CRAR notice or ongoing rent arrears are adding to wider pressure on your company, Harbourfirst can introduce you to a regulated insolvency practitioner or solicitor to talk through your options — start an enquiry.