Q: I have a tenant who is overdue with the rent on shop premises I own. I am now considering instructing bailiffs to seize goods from the premises to cover the rent arrears. Do I need to be aware of any specific legal issues in this respect?
A: Currently an ancient self-help debt recovery solution known as the right of distress gives commercial landlords the right to recover rent arrears without going to court, by instructing bailiffs to seize, impound and sell tenant owned property held at the premises. However, from April 6th 2014 ‘distress' is scheduled to be replaced by a new procedure called Commercial Rent Arrears Recovery (CRAR).
As with the current procedure CRAR limits the types of goods that can be seized and sold. It applies only to commercial premises and only where there is a written lease. It may not be used where premises comprise both residential and commercial occupancy under the same lease.
At least 7 days arrears must be owed before CRAR can be exercised and then a 7 day notice of intention must be served on the tenant. The notice must be indemnified and served by a certified enforcement officer who similarly must attend the premises to seize the goods following expiry of the notice period. If however the landlord suspects that the tenant may remove goods from the premises to avoid seizure, a court order may be applied for to reduce the notice period.
CRAR requires that entry to the premises must be through a door or other usual means of access. Following the seizure of goods the landlord must provide a valuation of the items to the tenant and serve a further 7 day notice in respect of selling them.
It is important to note that the above is only a basic overview of CRAR and you should seek expert legal advice before taking any action to recover rent arrears.