New Law of Distress for Commercial Landlords
From 6th April 2014, new regulations apply known as Commercial Rent Arrears Recovery (CRAR), bringing into force provisions under the Tribunal Courts and Enforcement Act 2007 and abolishing the old common law rules of distress on goods for non-payment of rent.
The key changes are:
- CRAR can only be used to recover rent, vat and interest, not other sums such as service charges and insurance, irrespective of whether they are described as rent
- Seven clear days notice of enforcement must be given to the tenant. There is ability to apply to the court to shorten this if it can be shown that goods are likely to be moved otherwise
- CRAR can only be exercised for a minimum sum of 7 days rent
- only goods belonging to the tenant can be seized. Goods which are necessary for the tenant’s personal use or in connection with trade are exempt up to aggregate value of £1350. Items in use by the tenant cannot be seized if a breach of the peace is likely
- the enforcement agent (who must be certificated and there is a stricter regime for that) may not seize goods which have a value greater than the debt and must wait 7 days before sale and give 7 days notice of sale to the tenant unless the goods would otherwise become unsaleable or their value substantially reduced.
Please contact us if you require any further information about these changes.
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