Start with the lease
Every route below depends on what the lease says, so the first ten minutes are best spent reading it. Look for:
- ✓The rent and when it falls due, and whether service charge or insurance is reserved as rent.
- ✓An interest clause, which sets the rate you can add to late rent.
- ✓A right of re-entry (the forfeiture clause), and whether it applies to rent "whether formally demanded or not".
- ✓A guarantor, or a separate rent deposit deed.
- ✓Who the tenant actually is: the company, with its registered number, or the individuals named.
Then draw up an arrears schedule that shows principal rent separately from everything else. Several of the routes below recover rent only, and a schedule that mixes the two is the most common reason a recovery stalls.
Ask for it, in writing
A clear written demand, with the figure, how it is made up, and a date for payment, settles a surprising share of arrears on its own. If the tenant offers a payment plan, put its terms in writing, including what happens if an instalment is missed. Be careful with one thing: if you may want the premises back, accepting or demanding rent that falls due after you know of the arrears can waive the right to forfeit. Decide which outcome you want before you write.
Use the rent deposit
If the tenant paid a rent deposit, the deposit deed usually lets you draw on it to cover unpaid rent, often with an obligation on the tenant to top it up afterwards. It is quick and needs nobody's permission, but follow the deed's own procedure for notice and drawing down, and keep a clear record of what was taken and why.
Pursue a guarantor or a former tenant
A guarantor named in the lease is usually liable for the rent the tenant has not paid. If the lease has been assigned, a former tenant, or its guarantor, may still be liable too, but only if you serve a notice on them under section 17 of the Landlord and Tenant (Covenants) Act 1995 within six months of the rent falling due. Miss that window and the claim against them for that rent is lost, so diarise it the day an assigned tenant falls behind.
Former tenant liability: Landlord and Tenant (Covenants) Act 1995, section 17.
Commercial Rent Arrears Recovery (CRAR)
CRAR is the statutory route for recovering unpaid rent without going to court. Certificated enforcement agents give the tenant a Notice of Enforcement, then attend the premises to take control of the tenant's goods if the rent is still unpaid. Most tenants pay once the notice arrives. It can be used when:
- ✓the premises are wholly commercial, with no part let or used as a dwelling;
- ✓there is a written lease;
- ✓at least seven days' rent is unpaid, both when notice is given and when goods are taken;
- ✓the claim is for principal rent, with VAT and interest on it. Service charge and insurance are outside it.
Since 1 May 2026 the tenant has fourteen clear days after the notice before agents may attend, so the earliest attendance is usually around day 17. The fees are fixed by regulation. Exercising CRAR treats the lease as continuing, so it waives the right to forfeit for the same arrears. If the premises are sublet, a notice to the sub-tenant can redirect their rent to you instead, with nobody attending at all.
Our commercial rent arrears recovery service covers how we run it day by day, and what is CRAR? explains the rules in full.
Forfeiture: taking the premises back
Where the lease has a right of re-entry and the rent is unpaid for the period it specifies (often 14 or 21 days), a landlord can end the lease by forfeiting it. For purely commercial premises this is usually done by peaceable re-entry: changing the locks while the premises are empty, with no force and nobody inside. A section 146 notice is not needed for rent arrears, and most modern leases remove the need for a formal demand.
Forfeiture gets the premises back, not the money, although the arrears remain a debt you can still claim. The tenant can apply to the court for relief, usually by paying everything owed, and any act that treats the lease as continuing after you know of the arrears can waive the right. Our guide to forfeiture of a commercial lease covers each step, and our forfeiture service carries it out.
A money claim through the court
A court claim recovers everything due under the lease, including service charge, insurance and interest, and it does not depend on the tenant having goods at the premises. Claims for a fixed sum under £100,000 can be issued online through Money Claim Online. Before issuing, send a letter before claim and give the tenant a reasonable time to respond, as the pre-action rules expect. A claim for rent must normally be issued within six years of the rent falling due.
A judgment is only paper until it is enforced. A County Court judgment of £600 or more can be transferred up to the High Court for enforcement by a High Court Enforcement Officer, and one of £5,000 or more on a business debt is enforced there as standard. Our High Court enforcement page explains how a writ of control works.
Limitation: Limitation Act 1980, section 19. Transfer for enforcement: High Court and County Courts Jurisdiction Order 1991, article 8.
A statutory demand
Where a company tenant owes £750 or more and the debt is not genuinely disputed, a statutory demand gives it 21 days to pay before a winding-up petition can be presented. For an individual tenant the bankruptcy threshold is £5,000. It is a pressure tool, and a strong one, but it is the wrong route for any debt the tenant can credibly dispute: the court can restrain a petition on a disputed debt, with costs against the landlord.
Thresholds: Insolvency Act 1986, sections 123 and 267.
Which route, and in what order?
| If you want | The usual route |
|---|---|
| The rent, and to keep the tenant | CRAR, after a written demand |
| The premises back | Forfeiture, and a claim for the arrears afterwards |
| Service charge or insurance as well as rent | A money claim, or forfeiture where the lease allows |
| Rent from a tenant who has left | The rent deposit, a guarantor, then a money claim |
| A judgment paid | High Court enforcement |
| Pressure on a company that will not engage | A statutory demand, where the debt is undisputed |
Routes can be combined, but not in any order. CRAR and forfeiture pull in opposite directions, because one treats the lease as continuing and the other ends it. Decide which you want before you take either step.
Mistakes that cost landlords money
- ✓Accepting rent before deciding on forfeiture, which can waive the right to re-enter.
- ✓Including service charge in a CRAR notice, which can make the notice defective.
- ✓Serving on the old seven day notice period, which stopped applying on 1 May 2026. See what changed.
- ✓Missing the six month window for a section 17 notice on a former tenant.
- ✓Changing the locks with someone inside, or on premises with any residential use.
This guide explains the general position in England and Wales. It is not legal advice, and it is not a substitute for taking advice on a specific lease. If you would like us to look at a particular set of arrears, send us the details and we will tell you plainly which route applies.