Legal advice: Distress remedy ripe for revision

Related tags Renting Lease

Distress is an ancient remedy by which a landlord who is owed rent is able to take possession of goods which are on the tenant's premises. He can...

Distress is an ancient remedy by which a landlord who is owed rent is able to take possession of goods which are on the tenant's premises. He can then either hold them as security for the rent, or sell them and use the proceeds of the sale to satisfy the arrears.

But this method is changing, as ways of regulating the process and making it more compatible with human rights are considered.

In July 2006 the government published the Tribunals, Courts and Enforcement Bill. This will transform the procedure if the Bill becomes law - which is likely within the next two years. The main changes are:

  • The new procedure will only be available for purely commercial leases, and may not be exercised in premises where any part of the premises is used as a dwelling. If this is implemented, it would mean that pub landlords will no longer be able to levy distress if anyone is residing in the premises (whether it's the tenant, staff or third parties).
  • The landlord will be required to give the tenant prior written notice before he can seize possessions, to enable the tenant to obtain legal advice.
  • Only 'pure' rent will be recoverable so no service charges or insurance premiums will be recoverable by distress, even if these are payable as fixed amounts each quarter. Nor will the trade debt be recoverable, even if it is classed as 'rent' in the tenancy agreement.

The current law remains in place until further notice, but it is important that everyone knows what may be around the corner.

Related topics Legislation

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