A landlord’s letter warning of a CRAR notice can feel like the ground has shifted under your feet. The good news is that CRAR runs on strict rules. There are defined notice periods before anyone can attend, only certificated enforcement agents can act, and there are clear limits on what can be recovered.
Handled calmly and in sequence, CRAR need not be the end of the road. The law sets out what rent qualifies, what the notice must say, and how the taking-control-of-goods process works in England and Wales. See how Anderson Brookes can provide advice and help you to tackle a CRAR notice with confidence.
CRAR Definition: When Does It Apply?
Commercial Rent Arrears Recovery, or CRAR, is a statutory power that allows a commercial landlord to recover qualifying rent arrears by using the Schedule 12 “taking control of goods” procedure. In plain terms, if the rules are followed, an authorised agent can take control of goods at the premises to recover unpaid rent.
CRAR is specific to England and Wales. It replaced the older common-law remedy of distress for rent in 2014 and is not the regime used in Scotland or Northern Ireland.
Only certain debts qualify. CRAR is for principal rent under a written commercial lease. VAT and contractual interest can be included, but charges like insurance and service charges sit outside CRAR and require other routes if unpaid.
Critically, CRAR is exercised by certificated enforcement agents, not by the landlord personally, unless the landlord holds the relevant certificate. This keeps the process regulated and ensures notices and attendances meet the statutory requirements.
Finally, CRAR cannot be exercised without prior warning. Before an agent can take control of goods, the debtor must receive a notice of enforcement giving at least 7 clear days. Sundays, bank holidays, Good Friday and Christmas Day do not count towards that minimum.
Note: this guide focuses on England and Wales. The approach to commercial rent recovery differs in Scotland and Northern Ireland.
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How a CRAR Notice Works
When CRAR Can Be Used
The power only arises if there is at least 7 days’ net unpaid rent and that threshold must be met both immediately before the notice is given and immediately before goods are first taken into control.
Minimum Notice Period
An authorised, certificated enforcement agents company must serve a notice of enforcement giving no less than 7 clear days before taking control of goods. Sundays, bank holidays, Good Friday and Christmas Day do not count. In urgent cases a court can allow a shorter period.
What the Notice Must Include
The Regulations prescribe the contents, including the amount outstanding, any interest to date, fees incurred so far and possible further fees, how to pay, contact details, and the deadline to avoid enforcement. If any of these elements are missing, enforcement may be challengeable.
How the Notice Can Be Served
Service can be by post, hand delivery, certain electronic means, or personal service. For companies, service to the trading address or registered office is permitted. Details on this are set out in the Taking Control of Goods Regulations 2013.
Statutory Stages and Fees
From the moment the notice is served, you are in the compliance stage. If payment is not made by the deadline, an attendance may follow at the enforcement stage, and if removal and sale are required, the sale or disposal stage. Each stage carries fixed statutory fees under the Fees Regulations, with percentage fees applied above set thresholds.
Typical Sequence
In many cases the flow is: notice served, short window to agree payment, first visit if unpaid, controlled goods agreement or removal if no arrangement, and sale if the debt remains. Timings vary, but the 7-clear-day rule always anchors the start of the process.
What Enforcement Agents Can and Can’t Do
When attending, certificated enforcement agents must show identification and written authority to act. They must also provide the required notices or Controlled Goods Agreement (CGA) paperwork on request.
Agents should gain access without unlawful force and typically enter through a normal door or usual means of access. They may visit between 6am and 9pm, or during trading hours if those fall outside the usual window. A court can authorise attendance outside these hours in limited circumstances.
The regime prioritises peaceful entry. While Schedule 12 allows reasonable force in specific situations where the court authorises it or on re-entry in accordance with the Act, initial attendance for CRAR does not normally involve forcing entry.
If goods are listed but left on site, a CGA records that the goods are under control and sets out payment terms. Breach can lead to removal and sale. Agents must produce the CGA on request and follow the statutory process for any later re-entry or removal.
What Can Be Taken
CRAR targets goods that belong to the debtor at the commercial premises. Certain items are exempt under the regulations, and goods owned by third parties or subject to obvious finance or lease arrangements should not be taken without following the appropriate procedures to resolve ownership.
What Cannot Be Done
Agents cannot recover non-rent charges like service charge or insurance through CRAR. They must not act on bank holidays or Christmas Day, and they must comply with content and timing rules for notices before any attendance.
Standards of Conduct
The National Standards require professional behaviour, clear communication, and sensitivity to circumstances. These standards sit alongside the legal rules and are a helpful benchmark when assessing conduct.
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Typical Timeline and Fees
Once a valid CRAR notice has been served, enforcement follows the Taking Control of Goods framework with three fee-bearing stages: the compliance stage, the enforcement stage, and the sale or disposal stage. These stages are defined in the Taking Control of Goods (Fees) Regulations 2014.
The notice of enforcement must allow at least 7 clear days before attendance. In practice, when a notice is posted and time for delivery is added, first attendance is often around day 12 if no arrangement is agreed.
CRAR Stages
Compliance stage fee: When the notice is issued, the compliance stage begins. A fixed fee of £75 is added to the debt at this point. Paying in full within the notice window avoids the next stage.
Enforcement stage fee: If payment is not made, a certificated agent may attend the premises. On the first visit, a fixed £235 fee is applied, plus 7.5% of any principal sum above £1,500. A Controlled Goods Agreement is often offered at this stage.
Sale or disposal stage fee: If payment or an agreement fails and goods are removed for sale, a further fixed £110 fee applies, plus 7.5% of any amount over £1,500. Additional, reasonable disbursements can also be charged in limited circumstances under the Regulations.
CRAR Timeline at a Glance
- Day 0: Notice of enforcement served; compliance stage starts. Fee: £75.
- Days 1–7: Opportunity to pay or agree a plan. No attendance may occur within this period.
- Around day 8–12: First visit if unpaid, enforcement stage fee applied; CGA may be signed.
- Later: If the CGA is breached or no agreement is reached, goods may be removed and sold. Sale stage fee applied and any permitted disbursements added.
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Immediate Steps to Protect Your Position
- Check the notice is valid. Confirm the basics: the amount of arrears, calculation of interest and VAT, and that you have been given at least 7 clear days before any attendance. Sundays and bank holidays do not count towards that minimum.
- Verify who is acting. Only certificated enforcement agents can exercise CRAR. Ask for the agent’s name and certification details and keep copies of any paperwork or emails.
- Keep communications in writing. A short, realistic plan that sets out what can be paid and when will often pause attendance while it is considered. Provide evidence such as a rolling cash flow, key debtor receipts and any seasonal factors.
- Protect essential trading equipment. If items are on finance or clearly owned by a third party, collate proof of ownership. This will help challenge any wrongful inclusion in a controlled goods list if agents attend.
- Map the wider creditor picture. Pressure from landlords is often coupled with court action elsewhere. If you have a recent County Court Judgment or are dealing with the CCJ process, factor those timelines into your plan to avoid conflicting promises and missed deadlines.
- Preserve formal options. Some regulated processes can pause or prevent CRAR once they are in place, including administration with its statutory moratorium. Early, specialist advice is critical if a time-limited window exists to protect value.
- Keep staff informed and premises secure. Make sure reception or front-of-house teams know who may attend and how to escalate to a director. Ensure the usual access points are locked outside trading hours and that any sensitive equipment is logged and insured.
- Record everything. Keep a dated log of calls, emails, notices received and any visits. Accurate records support challenges to non-compliant notices or fees and help us negotiate with the landlord’s agents.
Options If Your Landlord Threatens CRAR
Negotiate a Short, Realistic Payment Plan
Open with numbers. Offer what can be paid now and when the balance will follow, supported by a simple 6–8 week cash flow. Ask for written confirmation that attendance will be paused while the proposal is considered. Keep everything in writing and log every call and email. If an attendance has already happened, a controlled goods agreement can formalise staged payments, provided it is affordable and clearly documented.
Formal Restructuring to Protect Value
If the core business is viable but cash flow is temporarily squeezed, formal processes can create headroom to agree a deal with creditors.
- Company Voluntary Arrangement (CVA): CVAs can compromise rent arrears as part of a broader plan with suppliers and HMRC. They work best when landlords see a credible return compared with enforcement.
- Administration: Filing a notice of intention to appoint, then appointing administrators, creates a statutory moratorium. During the moratorium, landlords cannot proceed with CRAR without consent of the administrator or the court, which allows time to stabilise trading or pursue a sale of the business.
Close in a Controlled Way
Where forecasts show ongoing losses or no realistic prospect of catching up the arrears, closing in an orderly, compliant way usually protects directors and creditors better than ad hoc enforcement. We can explain likely company liquidation costs and the practical steps for closing a UK limited company, including timelines and creditor notifications.
Sector-Specific Pressures
Seasonality, high fixed premises costs and staffing patterns can make CRAR pressure feel acute. We offer tailored support and sector insights, including advice for hotels and hospitality businesses and advice for pubs.
If Enforcement Proceeds Despite Proposals
Understand the stages and fees so there are no surprises. After the notice period, an attendance moves the matter into the enforcement stage. If goods are later removed and sold, the sale stage fee applies. Statutory fees are fixed at compliance, enforcement and sale stages, with percentage uplifts above £1,500 of principal. Where a controlled goods agreement is in place, a breach can lead to removal and sale.
CRAR vs Other Landlord or Creditor Actions
CRAR focuses on recovering rent from goods. It is different from forfeiture, which targets possession of the premises. If a landlord is considering both routes, strategy and timing matter, and there can be interactions between exercising CRAR and the right to forfeit. Early advice helps to avoid unintended waiver issues.
CRAR vs Forfeiture of the Lease
CRAR is about recovering rent from goods at the premises. Forfeiture is about regaining possession. Landlords often weigh these side by side because exercising one can affect the other, and timing is critical. CRAR requires statutory notices and certificated agents, while forfeiture relies on a valid right to forfeit and usually a peaceable re-entry or court order. The strategic choice turns on whether the landlord wants money or the premises back.
CRAR vs County Court Action
A court claim leading to a County Court Judgment is a different route that creates a judgment debt. Once judgment is obtained, a creditor can pursue methods like warrants of control, third party debt orders or attachment of earnings. These court-based tools sit outside CRAR and are used when the landlord, or any creditor, wants the authority of a judgment and access to the court’s enforcement options.
CRAR vs Statutory Demand and Winding-Up
A statutory demand is a formal request to pay a debt. Non-payment of a liquidated, undisputed sum can be relied on as evidence of insolvency for a winding up petition. This is a company-ending remedy aimed at collective recovery for all creditors rather than targeted rent recovery. It can be used by landlords or other creditors where the debt is due and undisputed.
The Effect of Administration
If administrators are appointed, or a notice of intention to appoint is filed, a statutory moratorium generally stops landlords from starting or continuing CRAR without consent of the administrator or the court. This pause is designed to protect the business while a rescue or sale is explored.
Which Route Is Most Likely?
In practice, a landlord threatening CRAR is signalling a focus on rent recovery against goods. If proposals are not agreed, they may consider forfeiture to take back the premises or court action to secure a judgment. In parallel, other creditors might serve statutory demands with a view to winding up. Understanding how these levers interact helps set priorities and timelines for response. Recent reviews of civil enforcement also underline that court enforcement can be slow, which sometimes makes negotiated outcomes more attractive where viable.
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Sub-Tenants and Rent Diversion
If there is a sub-lease, landlords may serve a separate notice on sub-tenants to divert rent to clear arrears. That notice takes effect after 14 clear days. Any strategy should account for this possibility when modelling cash flow and negotiation options.
- How rent diversion works: Where CRAR is exercisable, a superior landlord can serve a Section 81 notice on any sub-tenant requiring future rent to be paid directly to the superior landlord until the arrears are cleared. This is a statutory right and runs alongside the main CRAR process.
- When it takes effect: The Section 81 notice takes effect 14 clear days after it is served on the sub-tenant. Payments made under the notice discharge the sub-tenant’s liability for rent under its own sub-lease to the extent paid.
- What the notice must contain: The Regulations set the required contents. The notice must be in writing, signed by the superior landlord, state the amount recoverable by CRAR from the immediate tenant, confirm that the sub-tenant must pay its rent to the superior landlord while that amount remains unpaid, and explain that the notice can be replaced or withdrawn.
- How it must be served: Service must follow the permitted methods for CRAR notices, for example post, hand delivery or specified electronic means. Keep proof of service because the 14 clear days run from the date of service.
- What to do if you have sub-tenants:
- Map any sub-tenancies and rent due dates immediately, as diversion reduces cash inflow at the head-tenant level.
- Communicate quickly with sub-tenants. If a notice arrives, ask them to share a copy so you can adjust cash flow forecasting.
- Factor diversion into proposals to the superior landlord. A short plan acknowledging reduced receipts is more credible than one that ignores them.
- If you believe a notice is defective, take advice promptly. Defects can include errors in the notified amount or missing prescribed information.
- If a sub-tenant does not comply: After a valid Section 81 notice takes effect, the superior landlord may pursue the sub-tenant for sums due under the notice using the relevant enforcement routes. This sits within the same statutory framework that underpins CRAR.
Current Market Context
- Official figures show that company insolvencies in August 2025 were slightly higher than the same month in 2024 and broadly in line with elevated 2023 levels. There were 1,600 creditors’ voluntary liquidations, 311 compulsory liquidations, 121 administrations and 16 CVAs in August alone.
- The ONS Business Insights survey reports continued cost and cash-flow pressures across many sectors, with resilience indicators still under strain in mid-2025. These near-real-time insights are the latest available and track trading conditions, input costs and self-reported financial performance.
- Policy changes are also in play. Government has consulted on reforms to the Taking Control of Goods regime in 2025, including adjustments to fee thresholds and wider regulation of the enforcement sector, which could influence CRAR practice once implemented.
Frequently Asked Questions
Can a CRAR notice include service charges or insurance?
No. CRAR is limited to principal rent (plus VAT and contractual interest). Sums like service charge or insurance are not recoverable through CRAR and require other routes.
How much rent must be overdue before CRAR can start?
At least 7 days’ net unpaid rent is required before CRAR is exercisable. That threshold must still be met immediately before goods are first taken into control.
What is the minimum notice period before attendance?
You must receive a notice of enforcement giving at least 7 clear days before an agent may take control of goods. Sundays, bank holidays, Good Friday and Christmas Day do not count in the calculation.
Who can act under CRAR?
Only certificated enforcement agents can take control of goods. The landlord personally cannot exercise CRAR unless appropriately certificated.
Can agents force entry to a shop or office?
Initial entry is normally by peaceful means and within permitted hours, although Schedule 12 allows force only in limited, legally authorised circumstances. If you are unsure about any attendance, take advice immediately and keep everything in writing.
What happens if goods are listed but left on site?
The agent may invite you to sign a Controlled Goods Agreement. Breach of that agreement can lead to removal and sale, subject to the statutory procedure and fees.
Do the CRAR fee stages apply in every case?
Yes. The Fees Regulations prescribe fixed fees at the compliance, enforcement and sale or disposal stages, with percentage uplifts above certain thresholds.
Does administration stop CRAR?
Usually, yes. Appointment of administrators (or filing a notice of intention to appoint) triggers a statutory moratorium, so landlords cannot start or continue CRAR without consent of the administrator or the court.
What if there is a sub-tenant?
A superior landlord may serve a notice on a sub-tenant requiring future rent to be paid directly to the superior landlord. That notice takes effect after 14 clear days.
How Anderson Brookes Helps
At Anderson Brookes, we give calm, regulated, plain-English guidance from the first call. Our approach is to stabilise the position, reduce risk, and map practical outcomes.- Triage and timeline planning. We confirm whether the notice is compliant, validate dates and “clear days”, check who is acting, and log any previous attendances.
- Creditor strategy. We review the wider position, including any other creditor action, so proposals do not conflict.
- Negotiation support. We prepare short, realistic payment proposals backed by cash flow. Where appropriate, we help structure a Controlled Goods Agreement you can actually meet.
- Formal protections. If the business is viable, we assess whether restructuring tools can create headroom. If closure is the right answer, we explain likely company liquidation costs and the steps for closing a UK limited company, so you can proceed confidently and compliantly.
- Sector insight. Premises-heavy sectors feel CRAR pressure acutely. We provide advice that reflects the cash-flow patterns and seasonality that often sit behind arrears.