On 19th October we hosted a webinar on commercial property, we had over 170 people attend. We've compliled the second part of the Q&A for you here.
If CRAR has taken place with control of goods on premises and rent still not paid and goods worth less then what do you do? Who would bear the loss?
The decision to either cut the financial losses or continue to pursue the debt would have to be made by the client or property owner, it might not be worth pursuit if the debtor is known to lack the assets or finance to pay the debt. It may be worth considering attending at a busy time of year such as the lead up to Christmas when more goods may be available to seize and therefore you will be more likely to recover goods to the full amount. Where we have a controlled goods agreement it would generally be based on the Officer’s view in relation to value of goods seized as there would be no point removing and incurring costs outweighing the value said assets.
From experience, the High Court has advised that we should be using county court bailiffs first rather than going straight to the High Court. What is your experience of this and will there be a delay in obtaining possession going straight to the High Court for a writ?
Unless there is no need for leave to transfer (such as in the case of trespassers, squatters, mortgage cases or persons unknown) there must be a compelling reason for the judge to grant leave to transfer up, however there should not be an issue doing so. County Court bailiffs often have a backlog of cases, the waiting time can be onerous and impact negatively on finances of the landlord if the tenant is not evicted swiftly. From the date of issuing of the section 8 or section 21 to receiving vacant possession is approximately 3-9 months with the current county court backlog of 3-14 weeks.
What would be the best course of action if a tenant has been in situ for a number of years without rental payments or a lease, inherited case under a land-swap.
This depends on the circumstances, it would be best to seek legal advice in such a circumstance.
Are you valuing the goods on a retail basis or a forced sale basis?
The goods are valued on the predicted resale value, this must take into account any additional fees such as auction/storage fees.
Who owns property & stock left at premises after forfeiture of lease, if tenant has stopped trading and has stock creditors.
A tort notice is given with a specified time of either 7, 14 or 18 days (reasonable notice) if no one responds then landlord can dispose of the goods as they see fit. Once the lease has been forfeited we always suggest that you take legal advice before issuing the Tort notice.
What happens if the goods seized are of higher value than the debt?
We would obtain an order from the court allowing us to sell the item at the expected value. If this is granted, then the goods are sold and the tenant gets the leftover money, net of the High Court Enforcement fees.
How can CRAR be used for farming tenants?
You can seize crops and stocks from farmers or assets from the farmer, you will need to check that any vehicles or equipment is owned and not leased before taking control of them.
What if there is no open door through which to enter the property?
As enforcement agents we would knock on the door, and if we are allowed in then that is fine, we can be very persuasive. With Commercial properties we are unlikely to be refused entry, as most business premises are accessible during trading hours this has never been an issue.
If legal advice is required can the cost be recovered with CRAR?
No, CRAR can only be used to recover rent and associated charges (Rent, interest and VAT).
David is an authorised High Court Enforcement Officer and our Director of Corporate Governance