It is proposed, after recent Government consulation, that as early as summer time this year significant changes will be made to the way commercial landlords and their management teams recover rent arrears from tenants, and specifically the use of bailiff action.
The introduction of CRAR (Commercial Rent Arrears Recovery) will immediately change the process in which goods are seized in the recovery of rental arrears.
Neil Andrews, Commercial Litigation Solicitor at Coles Miller in Poole says “This is going to change the way commercial property landlords can now seize goods in respect of unpaid rents. Neil highlights the main aspects of CRAR as follows;
Only pure rent arrears can be recovered not service or other associated charges.
Only authorised Enforcements agents can exercise CRAR requirements who are specially trained and certified to do so
Landlord’s can only serve notice of enforcement where the tenant is at least 7 days in arrears
Minimum time between service of enforcement notice and seizing of goods is to be reduced from 14 to 7 days (which Landlords will be pleased to hear!)
Landlords will be able to permit the sale of seized goods at the premises
A "controlled goods agreement" can be signed by the parties, avoiding the need for the goods to be removed from the premises immediately.
Entry can only be by a door or other usual means.Windows can no longer be used, and entry can be gained only between 6am and 9pm (except for businesses trading outside these hours).
The issue of remedy of distress (collection of rent arrears) has been heightened recently due to the number of well known high street retailers falling into financial difficulty.
In the past remedy of distress has been criticised for being out of touch and for infringing the Convention Rights under the Human Rights Act 1998.
For more information on this contact Neil Andrews of Coles Miller on www.coles-miller.co.uk or call 01202 673011.