The Commercial Rent Arrears Recovery System
8 November 2013 by Leon Pascal
There are new rules being introduced from April next year; the Commercial Rent Arrears Recovery System. The scope of these rules, as the name suggests, will make changes to the way in which landlords can recover rent from defaulting tenants.
Currently landlords are able to rely on the common law right of distress, which allows landlords to arrive unannounced at their defaulting tenants’ premises and take away goods to cover the amount of rent owed. This method is cheap to implement and effective in practice but the new rules will end this convention.
The new system requires landlords to give 7 days clear notice in writing to the tenant that a bailiff will be attending. This could allow the tenant to remove goods from the property in advance of the action.
It is also worth noting that the only monies that are now recoverable are rent payments; no other charges such as service charges or insurance premiums can be secured in this way. Further, at all times there must be at least 7 days rent outstanding, if it goes below 7 days the process must stop.
These rules will only apply to exclusively commercial premises so 7 days notice may not actually affect in practice the seizure of goods, but time will tell.