Commercial rent arrears
Private landlords cannot use enforcement agents to take control of goods for rent arrears in residential properties. They must use repossession proceedings (see Chapter 13). If there are rent arrears for commercial premises (eg, shops, offices and factories), landlords can initiate taking control of goods without preliminary court action. This process is called ’commercial rent arrears recovery’.
The following principles apply.
•The exact nature of the business tenancy is not important. However, the lease between the landlord and tenant must be in writing.
•Only commercial premises are covered. If any residential accommodation is attached, such as a flat over a shop, the commercial rent arrears recovery process cannot be used and other remedies must be sought.
•Only rent in the narrow sense of the term may be recovered in this way. If the lease also makes provision for payment of service charges, insurance and other costs and these fall into arrears, these must be enforced by other means, such as forfeiture proceedings.
•The commercial rent arrears recovery process only applies to current tenancies. If the lease has been terminated, the procedure is not available.
•A minimum amount of arrears, equivalent to seven days’ rent, must be due before a landlord can instruct enforcement agents. However, as most commercial leases are payable quarterly or perhaps monthly, this restriction is unlikely to be relevant.
•A client can set off against their rent arrears any amounts owed by the landlord for breach of the lease (such as disrepair) that have been the subject of a successful claim for damages. If this is the case, they can apply to a court to cancel, or delay, commercial rent arrears recovery.
Provided the above conditions are met, the landlord can issue a ‘warrant of control’ (see here and here) to an enforcement agent. Thereafter, the process is identical to all the other debts described in this chapter.