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‘Diss’ing the law of distress

From 6 April 2014 the ancient self-help remedy of distress for rent is abolished and replaced by a process called Commercial Rent Arrears Recovery (‘CRAR’).

It has taken the government 6 years to give effect to CRARs which were first heralded in the Tribunals Courts and Enforcement Act 2007. Its answer is the Taking Control of Goods Regulations 2013. The changes amount to a substantial erosion of landlords’ current rights.In its early form, a landlord could enter premises, seize goods and hold them until any arrears of rent were paid. The Distress for Rent Act 1689 went one step further by permitting a landlord to sell the seized goods. The current law is piecemeal and fraught with complication. Many feel that the element of surprise is what gives the remedy ‘teeth’. Although a cheap and easy means of enforcement, it is perceived by commercial tenants, particularly retailers, as archaic and heavy-handed. It has already been abolished in Scotland.

What are the key changes? CRAR applies to tenancies in writing for payments reserved as rent. ‘Rent’ is defined as principal rent, VAT and interest only. It will not be available for other sums reserved as ‘rent’ like insurance premiums, rates or service charges. An amount equal to 7 days’ rent is the threshold. The remedy is only available for commercial premises, not mixed user premises. 7 clear days’ written notice of CRAR will be required. No longer will a landlord be restricted to entering premises to seize or remove goods between sunrise and sunset on any day other than a Sunday; under CRAR he can enter premises between 6am and 9pm on any day of the week (unless the premises are open for trade outside these hours). Tools of the trade up to a value of £1,350 may not be seized; nor can items in actual use where seizing them is likely to result in a breach of the peace. Walking possession is replaced by a Controlled Goods Agreement (to be further prescribed by regulations). The CGA will have to include an inventory. If a CGA is breached, notice must be given 2 clear days before the enforcement agent enters the property. Goods may be sold after 7 days, unless perishable in which case less.

Derek Kerr / 1st Nov 2013


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