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Commercial Rent Arrears Recovery In Cardiff

A large percentage of the number of businesses in Cardiff rent commercial properties. In recent years, this has become a popular thing to do rather than buying a location outright.

Smaller businesses commonly do this as they may not be able to accurately predict revenue and longevity.

Businesses in Cardiff will commonly use commercial leases for landlords and tenants to arrange this.

These leases include all terms and conditions, payment terms, service charges, rights of forfeiture etc.

As a result of this, commercial landlords have experienced issues with businesses not being able to pay rent on time.

When the payment of rent for commercial properties goes unpaid, this is classed a ‘Commercial Rent Arrears’.

Like with any business, it is imperative that a landlord’s cash flow be steady in order to survive.

When unpaid rent becomes an occurring problem, this can create a very stressful and difficult situation.

If payments for commercial premises continue to be withheld, landlords need to act proactively to recover what is owed.

Landlords may use statutory demands or winding up petitions to get the tenants to pay. These are all suitable methods, however, there are even better options available. In order to recover rent arrears, landlords will need to use a procedure called Commercial Rent Arrears Recovery (CRAR).

What Is Commercial Rent Arrears Recovery (CRAR)?

If you have not experienced the non-payment of commercial rent before, you may be unfamiliar with what CRAR is.

Since 2014, this has quickly become one of the most popular ways for landlords to take control of goods.

Commercial Rent Arrears Recovery allows landlords to seize any goods from a tenant in order to cover the arrears owed.

A notice of enforcement must be sent to the tenants at least 7 days before this takes place.

Although this method is primarily used, a tenant may want to terminate the lease instead.

The act of terminating the lease of a commercial property is classed as ‘forfeiture’.

Forfeiture

Forfeiture is the landlord’s right to terminate any lease if the tenant breaches the contract that is agreed upon.

The right of forfeiture only applies if the commercial rent remains unpaid for a specific period of time. This is outlined in the code of practice related to the lease.

Bailiffs, or enforcement agents, will often perform the action of recovering possessions.

This usually involves entering the property and changing the locks so the tenant cannot re-enter.

Commercial Rent Arrears Recovery and Forfeiture Suspensions

In March 2020, the government introduced a ban/suspension on the use of Forfeiture and Commercial Rent Arrears Recovery.

Following this, they encourage landlords of commercial properties to resolve rent disputes through the process of binding arbitration or negotiations.

In June 2021, a statement was made that announced the suspension was to be extended to 25 March 2022. These changes have left landlords in even more difficult positions.

As a result of the suspensions, the next viable step is to use a commercial debt collection agency.

Debt Collection Agency for Commercial Rent Arrears

The limitations that are presented as a result of the suspensions means that landlords need a solution.

Using a professional debt collection agency can help recover any shortfall in unpaid commercial rent arrears.

Whilst most debt collection agencies in the UK operate a nationwide service, it is beneficial to stick to a local agency.

At Debt Collection Cardiff, we help landlords across Wales find the best agency for their specific requirements.

Since 2006, we have put together a list of the most trusted and effective agencies for all debt collection needs.

Our partners ensure to not jeopardise any existing relationships between landlords and tenants.

This is achieved by providing the most professional and proactive service possible.

The agency that we recommend to recover commercial rent arrears is Federal Management.

Federal Management has operated since 2004, recovering millions of pounds worth of unpaid debts yearly for their clients.

They are regulated and authorised by the Financial Conduct Authority to recover debts under the Consumer Credit Act.

In situations where the lease is linked to an individual, our recommended debt collection agency is Frontline Collections.

They are leaders in private debt collection and have helped hundreds of landlords recover individual rent arrears.

For situations where the debtor is based overseas, Frontline Collections can also undertake international debt collection.

Both of our partners above operate on average success rates of up to 90% of undisputed debts.

Landlords will have the most affordable and effective recovery by choosing our services.

Commercial Rent Arrears Recovery in Cardiff – Summary

Collecting commercial rent arrears from businesses in a landlord’s property can be a challenging task.

Any company that fails to keep up with rent payments are liable for any arrears and actions can be taken.

With the right expertise, such as using a debt collection agency, the commercial rent arrears can be returned.

If you are a landlord and have a business failing to pay rent on time or at all, contact our partners today.

Debt Collection Cardiff – Frequently Asked Questions