Commercial Rent Arrears Recovery In Bristol

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Commercial Rent Arrears Recovery In Bristol

It has become common for businesses in Bristol to move their offices into rented properties instead of buying a building outright.

Businesses may find that renting a property can be more affordable than purchasing in full.

Knowing how much rent is to be paid each month can help any business plan its finances correctly.

This was especially true during the coronavirus pandemic and the financial difficulties it caused.

For small to medium businesses, this is especially true as they may not be able to predict monthly revenue properly.

The renting of commercial properties is a relatively straightforward exercise and is finalised through commercial leases.

This document is signed by both landlords and tenants and outlines all of their obligations.

It details specifics such as rights of forfeiture, service charges, payment terms and any terms and conditions.

Although this document is signed to reach an agreement, some commercial tenants may fail to pay rent on time or at all.

When obligations are not met and the payment of rent goes unpaid, the money that is owed is referred to as ‘Commercial Rent Arrears’.

Unpaid rent arrears are primarily classed as ‘priority debts’, meaning they can cause serious problems if left unpaid.

If commercial rent arrears are not paid, this can have serious repercussions such as being taken to the high court.

When commercial landlords are not paid, this can form a very stressful situation if cash flow is unstable.

It is no secret that cash flow is the lifeblood of any business, and may affect its longevity if damaged.

It is normal for landlords to feel like they have no place to turn, however, there are options available.

Some may use winding up petitions to recover the money that is owed but these are not always effective.

The main two options for Commercial Rent Arrears recovery is either terminating the lease or attempting to collect the arrears.

Landlords can take control and recover what is owed by carrying out Commercial Rent Arrears Recovery (CRAR).

Commercial Rent Arrears Recovery (CRAR) Explained

Commercial Rent Arrears Recovery (CRAR) was introduced in April 2014 after the common law remedy of distress became unused.

CRAR allows landlords to take control of goods from a tenant and sell them to cover the outstanding arrears.

This is a lawful procedure for landlords that are experiencing the issue of tenants not paying them.

Before CRAR can be used, the landlord must provide a notice of enforcement 7 days prior to the tenants.

Should no payment be made within this timeframe, the landlord can enter the property with enforcement agents to collect what is owed.

The entering of the property only applies if no payment is made, otherwise, this cannot be conducted.

Instead of using Commercial Rent Arrears Recovery, a landlord may want to terminate the lease instead.

If a landlord decides to terminate a lease, this action is commonly known as ‘forfeiture’.

Forfeiture

Forfeiture is the landlord’s right to terminate the lease if the agreement between tenant and landlord has been breached.

The breaching of the contract can include the non or late payment of commercial rent.

However, this only applies if the rent remains unpaid for a specific amount of time, which is outlined in the lease.

This is a common method for many landlords, as it provides a way to peaceably re-enter the property to recover possessions.

Bailiffs can also perform this on behalf of the landlord and will involve entering the property and changing the locks.

Suspensions To Commercial Rent Arrears Recovery And Forfeiture

Despite the popularity of the above methods, in March 2020, the government introduced a suspension on both.

The suspension was implemented to encourage landlords to resolve any disputes related to commercial rent through the process of binding arbitration.

Following its initial execution, it was announced in June 2021 that the suspension would be extended to 25 March 2022.

This has left many landlords in a difficult position with no view of how to recover commercial rent arrears easily.

Thankfully, there is a solution which many landlords can use to successfully recover any amount of arrears.

This can be done by instructing the services of a professional debt collection agency.

Debt Collection Agency For Commercial Rent Recovery

There are hundreds of debt collection agencies across the UK, however, it is beneficial to use one that is local to you.

At Debt Collection Bristol, we have helped hundreds of landlords find the right agency to recover commercial rent arrears.

Since 2006, we have put together a list of the most effective debt collection agencies in the city.

Our partners ensure to maximise the recovery of the arrears owed whilst minimising the cost of doing this.

If you are a commercial landlord that has suffered from the non or late payment of rent, we can help.

Our Debt Collection Agency Recommendations

Our recommended agency for the recovery of commercial rent arrears is Federal Management.

They are the leading agency in Bristol and the UK for recovering rent that is owed to landlords.

Since 2004, they have provided commercial debt collection services to hundreds of landlords.

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

Alternatively, if the lease is signed by a private individual, we recommend using Frontline Collections.

Frontline Collections are experts at recovering unpaid rent that is specific to private individuals.

They have provided their private debt collection service to landlords and businesses since 2005.

As part of the high-calibre service they provide, they can also carry out international debt collection for unpaid fees overseas.

Both of our partners above produce industry-leading recovery rates of up to 90% on average.

This demonstrates how effective their debt collection services can be for landlords and businesses alike.

Debt Collection Bristol – Frequently Asked Questions