In cases where you are looking to recover overdue rent, the use of enforcement officers or bailiffs is often seen as the option of choice, but changes to the law, specifically rent law, mean that this process may not be as easy as it once was.
Under the Taking Control of Goods Regulations 2013 which come into force in April next year, bailiffs will have a clear procedure they must follow to recover things like commercial rent arrears.
The new rules include:
- A minimum of seven days notice in writing of the intention to use the commercial rent arrears recovery process (CRAR).
- CRAR only allowed to be used to collect principle rent arrears of seven days or more, plus VAT and interest. It can’t be used for other sums, even if reserved as rent.
- A number of goods will be exempt from CRAR, including any tools of the trade, and goods owned by third parties.
- Taking control of goods will be limited to between the hours of 6am and 9pm, although they will now be able to collect on Sunday.
- Any notice served on sub-tenants requires a 14 day delay.
- Detailed procedures surrounding powers of entry, and how bailiffs take control of goods.
It could be argued that these new rules tip the balance towards tenants, especially the area surrounding the seven day notice period, which could render the bailiff process largely redundant if tenants choose to put goods elsewhere.
This in turn could see a move towards landlords using measures such as forfeiture or even pursuing court proceedings, which could in the long run prove very costly.
It is too early to tell which way the wind will blow on this, but it is advisable to seek legal advice straight away should your tenant fall into rent arrears, especially in light of these planned changes.
For more advice on commercial property purchases, or any other property law matter, please contact Owen McKenna on 01772 258321 or Owen.McKenna@harrison-drury.com