Recovering Commercial Rent Arrears
by David Carter on 12 July 2010
When tenants get into arrears with their rent, the landlord may use the ancient common law remedy of distress for rent to recover this money.
The landlord does not need to obtain a court order. He may simply instruct a Certificated Bailiff to enter the premises and seize goods (“distrain”) in order to sell them to recover the rent. It is a very fast and efficient process – the landlord can instruct in the morning and the bailiff can attend the same day.
While distress for rent only applies to rent, it has become common practice for landlords to include items such as service or maintenance charges under the banner of rent in the lease, in order that these may also be recovered at the same time, if also in arrears.
What is a certificated bailiff?
Certificated Bailiff means that the bailiff has been granted a certificate by a judge to levy distraint. The general certificate lasts for two years and is only awarded where the judge deems the applicant fit and proper and knowledgable of the law of distress. A person who is employed in a business that buys debt cannot be a certificated bailiff, nor can any officer of a county court.
What is the process?
The landlord instructs the certificated bailiff to attend the premises and levy. The bailiff must show the tenant his/her certificate and leave a memorandum detailing the inventory of what has been seized and the associated authorised fees, charges and expenses.
As with the vast majority of enforcement cases, we find at The Sheriffs Office that the mere attendance of the certificated bailiff is enough to persuade the tenant to pay all arrears. It is only on rare occasions that goods are seized. When they are, they are often left at the premises and a signed Walking Possession Order is obtained.
CRAR
The government has now published a draft Tribunals, Courts and Enforcement Bill, Part 3 of which contains the proposals for distress. The common law remedy of distress is to be abolished and replaced with Commercial Rent Arrears Recovery (CRAR). There is no date as yet for the implementation of CRAR and there is still detail awaiting confirmation and finalisation.
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Disclaimer: The statements and opinions expressed in this article are those of the author and do not necessarily reflect those of Sheriffs High Court Enforcement Ltd, trading as The Sheriffs Office. Sheriffs High Court Enforcement Ltd does not take any responsibility for the views of the author. The author will not be held responsible for any comments posted by visitors to this site. Please note that this article does not constitute legal advice. The author has used his best endeavours to make this article as accurate and complete as possible, but requests that the reader be aware that the law of England and Wales frequently changes. The author strongly advises the reader to take legal advice before embarking on any enforcement action.
