Five thousand reasons to request a rent deposit from Commercial Tenants.

Recent changes mean that the minimum figure for which a statutory demand can be served on an individual debtor is £5,000. This is an increase from the previous figure of £750.

This has potentially significant consequences for commercial landlords. Previously landlords were often able to use the statutory demand method as a swift way of obtaining payment of relatively minor arrears from difficult tenants without need to take action through the courts.

Now landlords may be forced to take action for arrears through the county courts in respect of sums under £5,000. This has risks in terms of the time that such action can take, the cost of so doing and the uncertainty that is inherent in such actions when it comes to recovering the costs of taking such action.

As a result the advice of our property solicitors is that now more than ever it is important to obtain a rent deposit from tenants both on new leases and assignments. This provides an accessible fund that can be utilised for minor instances of arrears. It is prudent to ask for a minimum of £5,000 if possible given the changes outlined in this blog although commercial realities may mean that on leases with an annual rent under £20,000 this is not possible.

Another alternative is to seek to utilise the Commercial Rent Arrears Recovery (CRAR) process. This is only effective for recovering rent. It does not assist with service charge arrears or any other sums due under the lease such as insurance rent. The intention of CRAR is to provide a smoother process of recovering rent arrears other than through the courts.

Our specialist property and litigation solicitors in Skipton, Keighley and Bradford are happy to advise in relation to negotiation of rent deposit deeds for commercial leases and on pursuing tenants for arrears be it through the courts or by means of CRAR.

For more information on this, or if you are seeking advice on any other Property issue, please contact our Property Law specialist James Dunn on 01756 793 333 or email

James Dunn

Partner and Commercial Property Solicitor

Tel: 01756 793 333