Commercial rent arrears: debt recovery options for landlords

Commercial landlords have the strongest recovery toolkit of any creditor: CRAR (seizing the tenant’s goods for pure rent arrears, without a court order), agency collection, a court claim with full enforcement behind it, plus lease-based levers — rent deposits, guarantors and, as a last resort, forfeiture. The right choice turns on three questions: is the tenant still trading, do you want them to stay, and what exactly does the lease let you do? One 2026 change to note before anything else: since 1 May 2026, CRAR requires 14 clear days’ notice of enforcement, double the old seven.

CRAR: taking control of goods without a court order

Commercial Rent Arrears Recovery is the remedy no residential landlord gets: a statutory right to have enforcement agents take control of the tenant’s goods for unpaid rent, no judgment needed. The conditions are strict:

• A written lease of purely commercial premises. If any part of the premises is let or used as a dwelling under the same lease, CRAR is off the table — mixed-use landlords must sue instead. Licences don’t qualify.
• At least seven days’ net rent outstanding, both when notice is given and when goods are taken.
• Principal rent only — plus VAT and interest on it. Service charge, insurance, repairs and rates are excluded even if reserved as rent, and an inclusive rent must be apportioned.
• 14 clear days’ notice of enforcement (excluding Sundays, bank holidays, Good Friday and Christmas Day) since 1 May 2026.
• Certificated enforcement agents only — you cannot seize goods yourself.
• Arrears no older than six years.

CRAR is powerful against a trading tenant with stock and equipment on site. It’s weak against a tenant with nothing worth taking — and the 14-day notice gives a determined debtor time to move goods, so think about the tenant you’re actually dealing with. One trap: exercising CRAR is generally treated as affirming the lease, which can waive your right to forfeit for those arrears. Decide the strategy before you instruct anyone.

Agency collection: pressure without the machinery

For plenty of situations CRAR doesn’t fit — mixed-use premises, arrears made up largely of service charge, a tenant you want to keep, or a tenant who’s left. A commercial rent arrears specialist pursues the whole debt (not just the CRAR-eligible slice), keeps the relationship professional, and many work no-collection-no-fee, so trying costs little. Compared with CRAR or court, it’s the lowest-effort lever you hold — and it doesn’t waive anything.

Before instructing, quantify everything the lease gives you: most commercial leases charge contractual interest on late rent, and it adds up. See our rent arrears recovery pillar for how the wider 2026 changes affect landlords.

A court claim: the route for everything CRAR can’t touch

A money claim covers what CRAR excludes — service charge, insurance rent, disputed sums, former tenants and mixed-use lettings. Judgment in hand, you can escalate to enforcement: taking control of goods, third-party debt orders against bank accounts, or a charging order over property. Larger judgments can be transferred to the High Court for enforcement by writ. The court route costs more effort up front but reaches money CRAR never will.

Forfeiture: the nuclear option

Most commercial leases let you forfeit for non-payment — typically by court proceedings or, for commercial premises, peaceable re-entry. It’s a genuine lever, but it ends the lease and the rent, leaves you with an empty unit in whatever market you’re in, and is riddled with traps: demanding or accepting rent after the right to forfeit arises can waive it, and tenants can apply for relief. Treat forfeiture as a strategic decision about the property, not a debt-collection tactic — and take legal advice before acting.

Guarantors and deposits: the levers landlords forget

Before spending money on any of the above, re-read the lease bundle. A rent deposit deed may let you draw down arrears without any court process, with the tenant obliged to top the deposit back up. A personal or parent-company guarantee gives you a second, often better-funded, defendant. On assigned leases, a former tenant or its guarantor may still be on the hook under an authorised guarantee agreement — but there are strict notice requirements, so take advice promptly.

Scotland and Northern Ireland

CRAR is England-and-Wales law only. In Scotland, commercial arrears go through the courts and Scottish diligence — and prescription generally extinguishes the debt after five years, so the clock matters more; see our Scotland page. Northern Ireland has its own courts, a six-year limit, and centralised enforcement through the Enforcement of Judgments Office.

Match the tool to the tenant

The pattern across all of this: CRAR for pure rent against a trading tenant, agency collection where relationships or scope matter, court for everything else, forfeiture only as a property decision. If collection is the next step, compare vetted agencies that handle commercial rent arrears — blind, so you choose on fees and specialism, not marketing — or let us match you to the right one. It’s free for landlords: the agency you choose pays for the introduction, and no agency can pay to rank.

This is general information, not legal advice. CRAR, forfeiture and guarantee claims all carry procedural traps — take specialist advice before acting on a specific lease.