Commercial Property

25/09/2009

"In the current climate, landlords will be getting nervous around the usual 29th September quarterly rent payment date, unsure whether their tenants are going to be able to pay.

"For landlords whose tenants can't pay the most effective option available is distraint. Under the ancient law of distress landlords can instruct a certificated bailiff to enter premises without notice to seize goods to the value of any rent arrears.

"A new 'Commercial Rent Arrears Recovery' procedure was recently due to become law, and would have signalled the end of a landlord’s right to distrain.

"However, to everyone's surprise, it was recently announced that the new procedure, which would have built in much more protection for tenants, has been put on hold until at least 2012 while the Government undertakes further consultation.

"This is particularly good news for landlords in the current climate where many tenants are struggling to pay rent and the instant use of a bailiff can be an essential tool for a landlord to ensure that it jumps the queue ahead of other creditors.

"For retail tenants unable to meet their payment terms, it now remains important to speak to their landlords quickly and explore all the options available to them to prevent the business disruption caused by a landlord sending in a bailiff."

Danny Revitt is a Partner in the Commercial Property team at Irwin Mitchell who represents both retail tenants and landlords.