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An End to Distress re Commercial Property

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An End to Distress (Commercial Property).

No this is not a bland promise by a firm of solicitors to end all your worries.

On the 6 April 2014 the right of Landlords of commercial premises to send in the bailiff to seize  the Tenant’s goods and sell them in satisfaction of rent arrears is to be abolished. It was called the right of distress and the right derives from the lease (if properly drafted) rather than a Court Order.

The new regime is called the Commercial Rent Arrears Recovery Scheme.

It requires a notice in a prescribed form warning that the bailiff will attend on a specified day to seize goods.  The notice has to be served (i.e received by the Tenant) at least 7 days before the attendance is due to take place. The value of any goods seized must not exceed the rent arrears and costs and cannot be sold for a further 7 days after seizure. The idea is that it gives the tenant an opportunity to pay the arrears to avoid the inconvenience of a seizure of their goods.  How it will work in practice if Tenants simply use the opportunity to move goods out of reach of the bailiff on the appointed day remains to be seen. The Court can shorten the time if you can show that is exactly what the Tenant will do.

Goods necessary for the Tenant’s Business and to a total value of £1,350 are exempt from seizure.

If Landlords get it wrong they can be sued for “conversion of goods”  amongst other claims and can face a hefty legal bill as well as damages should the seizure of goods have cost the Tenant money ( in a lost contract for instance or if the goods are sold - damages  for their replacement costs).

We can help to alleviate your worries by getting the procedure right.  Call Denise Woodman (Weston - Morston Court Office) or Janine Harris (Bristol Office)  for help getting it right or  Stephen Mackie (Weston or Bristol)  if you are a Landlord accused of getting it wrong . We can also help if you are a Tenant and have had goods seized without notice or under a notice that you want checked.