Commercial Rent Arrears Recovery

As soon as your tenant is in arrears, whether or not you think they will pay after a few days, contact PBS immediately.  We will send a 7 day Notice of Enforcement to the tenant giving them 7 clear days to pay. This is known as the Compliance Stage.

The cost set out by CRAR for this first stage of enforcement is £75 plus VAT, payable by the tenant. PBS do not charge landlords or managing agents. If the tenant pays in full or arranges a payment plan within the 7 day period, there will be no further charges.

If the tenant fails to pay we then move on to second stage of enforcement, by sending one of our enforcement agents to the tenant’s premises to Take Control of the Goods and arrange payment. This is known as the Enforcement Stage.

The costs set out by CRAR for this second stage of enforcement are as follows:

For arrears of £1,500 and under – £235 plus VAT.
For arrears over £1,500 – £235 plus 7.5% of the arrears outstanding minus the first £1,500, plus VAT.

If, once the landlord has taken control of goods, the tenant fails to pay or defaults on a payment arrangement, the landlord can instruct PBS to remove and sell the goods to cover the arrears. This is known as the Disposal Stage.

A 48 hour default notice must first be sent to the tenant, giving them the opportunity to bring things up to date before any removal action can begin.

The costs to the tenant for this third stage of enforcement are as follow:

  • Disposal stage fee of £110 plus 7.5% of the sum outstanding minus the first £1,500, plus VAT.
  • The auctioneer’s commission and out of pocket expenses
  • Storage costs
  • Reasonable disbursements incurred in respect of advertising the sale

The threat of removal is often the landlord’s most effective weapon and a landlord should not be afraid to take advantage. However it is worth considering the likely outcome of a sale before embarking on a removal, as any shortfall will be payable by the landlord.

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