The end of 'Landlord's Distress' has arrived.

With effect from the 6th April landlords will not be allowed to enter a property with the intention of confiscation of a tenant's belongings to pay for unpaid rent, this is being replaced by a new recovery system with the not so catchy title 'commercial rent arrears recovery'.

So how does the new system differ?

The biggest issue voiced by landlords as a potential problem is that under the new system there is a requirement to serve notice, this gives tenants the opportunity to remove any goods of value. The law has been introduced to protect the human rights of tenants but at the same time has it compromised the ability of a landlord to obtain payment for any monies owing?

The existing system prior to 6th April 2014.

Landlords can remove tenant's property if the tenant has not met the lease obligations and has fallen behind in payments, such as rent, insurance, VAT or other service charges included within the terms of the lease.

No notice is required by the landlord to undertake this action, the benefit to the landlord is that they do not need to undergo legal action and pay the costs of this, plus as they do not need to serve the tenant notice, the tenant does not have the opportunity to remove valuable goods.

The new system from 6th April 2014

As mentioned, the logic behind the change in the Law was to correct the perceived imbalance between landlords rights and the tenants human rights, so instead of the landlord being able to go ahead with any seizure, they must follow a course of action that must be undertaken before they can force seizure of a tenants goods.

The amount owing by a tenant must exceed seven days rent 'net' so does not include VAT or payments of interest, and must be still be the case when the notice is applied for and at the time of action being undertaken.

The new rules only apply to rent, not rates, insurance, or any other payments detailed in the lease; there are other rules about what can and cannot be claimed and at what time. Your solicitor will be able to evaluate each case separately and give you advice.

The notice period is 7 days excluding Sundays and some holiday days, it will be interesting to see how this works in practice as the argument is that a tenant, once they have received notice, will pay the outstanding amount, alternatively they can remove valuable items, enforcement of the notice can occur between 6am and 9pm with a few exceptions.

When a landlord is looking to enforce the notice they will have a number of options on how to deal with the goods they have seized: some will remain on the premises and some will be removed, it is possible that you can seize goods but let the tenant continue to use them, which can make practical sense if they need the items to earn money.

Once again your solicitor and enforcement agent will discuss this with you.
The changes in law will have an effect on the Landlord and may change the way they take deposits, as a larger deposit will afford greater protection.

We recommend you speak to a solicitor about your situation, as this is just an overview of the changes and does not cover the detail and exceptions.