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Commercial rent arrears law under discussion at BPF event

The new commercial rent arrears law has meant that commercial landlords no longer have a right of distress against their tenants to recover rent arrears, an issue that has been the focus of a British Property Federation seminar held this month.

 

The Ministry of Justice’s Commercial Rent Arrears Recovery (CRAR) programme – which was rolled out in April of this year – could be having a negative impact on the commercial property industry, experts say.

 

Landlords must now sign notification documents as well as provide a tenant with seven clear days’ notice of the intended enforcement action. There are concerns that tenants may take goods or vacate the premises if they have been given seven days’ notice of action, therefore leaving landlords out of pocket.

 

This month, Government representatives, commercial property landlords, debt recovery specialists and insolvency practitioners met at a British Property Federation seminar to discuss whether the new law is indeed having a negative effect on the sector.

 

It also examined whether the new legislation has been understood by the commercial property industry, and, if not, how this might be improved.

 

Debt recovery specialists the D2 Group reported that, in the three months since CRAR was implemented, 21 per cent of warrants were deemed ‘unrecoverable’, while 63 per cent of the premises referenced in these warrants were reported as ‘void’ or ‘empty’.

 

Chief executive of the British Property Federation, Liz Peace, said: “We hope that the discussion creates a good base to establish how effective CRAR has been so far. Having all parties affected by the new law discuss the subject together is the best way to establish an open dialogue, identify where problem areas might be, and decide how to best tackle them.”

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