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Viewpoint - 18/02/2014

CRAR – time to act

From 6 April 2014, landlords will lose the ability to instruct bailiffs in the current format. This will have serious implications on their ability to collect rent and service charge.

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Now is the time to act if you have any unpaid rent, service charge or insurance outstanding – especially if there are no queries or disputes.

Practical tips

As of the 6 April 2014, Landlords will only be able to instruct CRAR officers (the new bailiffs) to collect ‘pure’ rent, and even then, seven days written notice must be given if the intention to distrain. Some immediate practical tips include:

  • If you wish to distrain, act quickly at the March 2014 quarter day as there are only 12 days until the new CRAR legislation takes hold.
  • Prioritise your occupiers according to covenant risk (and debts owing) and proactively range their debt position prior to 6 April.
  • If tenants are paying off arrears via instalments, then where it is not clear or agreed what is being paid; ensure service charge is paid off first. This will enable ‘pure’ rent to be collected under the new process; or, if you have a tenant in a deliberate breach of a payment plan, you may want to recover the entire debt now.
  • If you have your annual insurance premiums to recover, it would be prudent to get these invoiced now, to give yourself time to instruct bailiffs under the current legislation.

There is a closing window of opportunity to act and landlords should give serious consideration to their options now before the distraint rules are tightened.


This article is part of Asset Class winter 2014.


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