Landlord’s on the back-foot, following changes to Distraint Rules

Historical article. Commercial Rent Arrears Recovery (CRAR) arrived in 2014 with seven clear days’ notice. Since 1 May 2026 the minimum is 14 clear days. That is the minimum notice of enforcement for CRAR and for every other enforcement that uses the Schedule 12 procedure, unless the court orders a shorter period because goods are likely to be moved or disposed of to avoid enforcement. If a debt advice provider asks on the debtor’s behalf before the notice period ends, the minimum notice becomes 28 clear days, unless the debt is non-eligible business debt: a debt incurred in connection with a business the debtor carries on, where the debtor, for the purpose of that business, is VAT-registered or is a partner in a partnership with any other person, and the debt solely relates to that business. For the current position see our guide to the notice of enforcement.

The BBC’s breakfast time series “The Sheriffs are Coming” will certainly need to take into account, new legislative changes to the enforcement of rent arrears. Since 6 April 2014, the landlord’s ancient right of distress against his tenant to recover arrears of rent has been abolished. For commercial premises only, it was replaced by a statutory regime for Commercial Rent Arrears Recovery (“CRAR”). The following significant changes were included in the 2014 reforms:-

Whilst under the old law of distraint, “certificated bailiffs” could seize goods without any notice, under CRAR at least 7 clear days’ notice had to be given to the tenant before the “enforcement agent” could take control of goods (the minimum has been 14 clear days since 1 May 2026).
Under CRAR, the rent must be due and payable, and the net unpaid rent (excluding interest, VAT and any permitted deductions) must be at least an amount equal to 7 days’ rent, both when notice of enforcement is given and when goods are first taken control of. Under the old law, distress could be levied once rent was due and unpaid.
From 6 April 2014 the landlord had to give 7 clear days’ notice (14 clear days since 1 May 2026), not counting Sundays, bank holidays, Good Friday or Christmas Day. Under the old law of distraint no advance notice was needed. The tenant was told of the distress only after the goods had been seized.
CRAR only applies to outstanding rent, VAT and interest due under leases in writing and does not extend to service charges, rates and insurance.
Under CRAR the tenant can apply to have the Notice set aside or apply for an order to stay enforcement, where previously, no such right existed.
Sub-tenants were previously compelled to pay the landlord directly, whilst under CRAR a landlord’s notice requiring them to pay rent to the landlord takes effect only 14 clear days after it is served.

These changes certainly have benefited the tenant’s position, by allowing a period of grace, if they are experiencing cash flow problems. Other options for landlords, would be to use the County Court Judgement process in order to enforce the liability, especially if services charges, rates and insurance are also outstanding.

Certainly, from an insolvency perspective, it will allow Insolvency Practitioners more time to consider alternatives and pre-emptive action, if one is advising the company that has fallen in arrears.

If you are either a tenant and cannot pay your outstanding rent arrears, or perhaps a landlord and need advice in relation the impact of CRAR and enforcement, perhaps it would be advisable to take professional advice and contact AABRS® to discuss in more details.