CRAR - Life After Distress

We previously posted a short guide to the new commercial rent arrears recovery procedures ('CRAR'). As CRAR comes into force on 6 April 2014, we wanted to pick out a key issue in how the timing will work.

Under the final version of the regulations, it remains the case that for a landlord to exercise CRAR, there has to be a minimum amount of 7 days' rent overdue. It seems to us that as soon as the quarter's rent is overdue, the amount is more than 7 days' rent and so the process can begin immediately. We have seen some more cautious commentary around that the rent itself has to be overdue for 7 days before a notice is served. We think that is unduly cautious and landlords should be able to exercise when, as the regulations say, an amount equal to 7 days' rent is overdue.