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government re-affirms abolition of distress for rent

22 February 2012
The Government has launched a public consultation which has confirmed its intention to abolish distress for rent (recovery of arrears of rent by seizure of the tenants goods) and replace it with a modern regime to recover commercial rent arrears.

Following the announcement of the new consultation process on bailiff law in mid-January 2012, there had been some doubt whether the long-delayed plans to abolish landlords common law remedy of distress for rent were to be abandoned. No longer. The new consultation document re-affirms the Governments commitment to bring the new system of Commercial Rent Arrears Recovery (CRAR) into force and to abolish distress for rent altogether.

This will be of interest both to property owners and occupiers. Anecdotally, landlords have increased their use of distress against struggling tenants (particularly retailers) in the faltering commercial letting market, as forfeiting the lease would often leave them with an expensive void. Concerns have been raised by landlords that CRAR (particularly the requirement to give the debtor notice prior to taking control of goods) would impede the effective recovery of rent arrears. This is one of several areas on which views are now sought.

The consultation also foreshadows the implementation of the other changes under Part 3 of the Tribunals, Courts and Enforcement Act 2007. It remains the Governments intention to unify the existing law relating to seizure and sale of goods for most purposes (including the recovery of rent arrears, non-domestic rates and judgment debts). Bailiffs and enforcement officers are to be known as enforcement agents. It is proposed that they will continue to be able to enforce the payment of rent arrears, other debts and fines but there is to be more protection against aggressive bailiffs and bailiffs conduct is to be more tightly regulated. That is perhaps not surprising given that bailiffs and distress for rent are governed by various laws, one of which dates back to 1689.

Schedule 12 to the 2007 Act will set new prescriptive and comprehensive procedures for seizing goods, to be known as taking control of goods, which will regulate the process all the way from the serving of a notice and seizure through to the distribution of the sale proceeds.

If you require any further information about distress, or the recovery of rental arrears please contact Kate Andrews.

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Optimus Education - HR and Employment Law in Education Leonardo Royal Hotel London Tower Bridge, 45 Prescot Street, London, E1 8GP

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CST Inaugural Annual Conference Hilton Metropole, NEC, National Exhibition Centre, Pendigo Way, Marston Green, Birmingham, B40 1PP

Come and meet the team at CST’s Inaugural Annual Conference this summer. Partner Nick MacKenzie will also be delivering a workshop on governance leadership.

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