CRAR and quarter days
Quarter days are the four dates each year where rent is traditionally due. Although some commercial leases will use the first day of the quarter instead, leases will often state annual rent is to be paid in four equal instalments on these quarter days.
The dates fall on religious days, this is historic so that they can be easily remembered. They are approximately three months apart.
Quarter days fall on the following dates:
- 25th March
- 24th June
- 29th September
- 25th December
These are the days that rent will be due and if commercial rent hasn’t been received on time, then you can use the Commercial Rent Arrears Recovery process (CRAR). This is the process of enforcement agents visiting the premises to either elicit payment or remove goods covering the rental arrears.
Commercial rent arrears recovery – the facts
- To carry out CRAR, there must be a written lease in place
- The rent must be at least 7 days overdue
- At least 7 days’ notice of enforcement must be given to the tenant (not including Sundays and bank holidays)
- CRAR must be carried out by certificated enforcement agents
- CRAR can only be used to recover rent, interest and VAT
The enforcement agents will visit the property. On the day, they are permitted to remove goods belonging to the tenant to cover the amount owed in rent arrears.
It is hoped that, when a tenant receives a notice of enforcement, this will elicit payment of the rent owed. If this isn’t the case, then the next step is for an enforcement agent to visit the property to undertake CRAR.
When enforcement agents can visit
They can visit the property between 06:00 and 21:00 on any day of the week, or alternatively during normal business hours if different. For example, a bar or nightclub might be open from 10pm-3am, therefore the enforcement agents are permitted to visit during these hours.
Under CRAR, any goods belonging to the tenant can be removed, although there is an exemption for tools of the trade to the value of £1,350. This is only for sole traders who have exclusive use of the tools, it does not apply to a trader with employees or to partnerships and limited companies.
Sale of goods notice
For the goods to be sold, there needs to be at least 7 clear days’ notice given, this must include the date, time and place where the sale will take place.
If the lease has been forfeited, CRAR cannot take place. If the landlord does exercise CRAR he is not permitted to then forfeit the lease during the same quarter.