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On 6 April 2014 the Common Law remedy of distress was replaced with Commercial Rent Arrears Recovery (CRAR) under the Tribunals Courts and Enforcement Act 2007.
Under CRAR, landlords of commercial premises have an automatic right to recover rent arrears by seizing goods, but the categories of goods that may be seized are limited and the right may only be exercised after following a strict procedure. The right is ‘automatic’, as a landlord who is owed rent in arrears need not apply to a court to exercise their right to enter property to claim assets to the amount of that owed – they can automatically enter.
There must also be evidence of the lease in writing.
The key motivation behind the introduction of CRAR is to redress the balance between the respective positions of the landlord and tenant. Rather than the landlord having pretty much free rein to ‘distrain’ (the Common Law right to enter leased premises and claim property to the value of arrears in rent), there are a number of new pre-conditions that must be satisfied before CRAR can be utilised.
It must be a commercial lease, in writing and will not apply where the premises are occupied as a dwelling with another use. At least seven days rent must be owed in arrears and at least seven days warning must be given (this can be reduced upon application to the court). So CRAR is a much less useful remedy for landlords than distress.
[See ‘Distress’, ‘Distraint’ and ‘Common Law’.]
Common Laws is based on case law (or judicial precedent), made by the courts and decided by judges. Judicial precedent operates under the principle of stare decisis which literally means ‘to stand by decisions’.
‘Common Law’ is the system of law based on judges’ decisions and on custom, rather than on written laws such as statute and legislation. An example is the common law offence of murder. There is no statute that rules murder is a crime; it has been ‘handed down’ by the decisions of courts over the years.
[See ‘Case Law’ and ‘Equity’.]
