CRAR - Commercial Rent Arrears Recovery

New regulations, CRAR (Commercial Rent Arrears Recovery), will come into effect on 6 April 2014 and replace the landlords existing right of distress against tenants to recover rent arrears.

CRAR ( Commercial Rent Arrears Recovery) - 6th April 2014

With these new regulations there are a number of significant changes;

1) CRAR applies to commercial premises only - should the lease contain any form of residential occupation, CRAR will not be applied. In the instance that one lease covers both a commercial and residential occupation, the landlord may well consider to separate the leases.

2) CRAR applies to rent and associated costs only - service charges, insurance and other costs are not covered by CRAR.  In the instance where the lease is inclusive of these costs, CRAR will only apply to the rental sum.

3) One of the biggest changes is the amount of notice that needs to be given to the tenant - 7 clear days of notice must be given before entering the property.  The landlord can apply to the court for a shorter period of notice should there be evidence that the goods will be moved from the premises before entry.

4) The notice must contain these key details; Name and Address of the Debtor, reference number, date of the invoice, details of the court judgement of which the debt is enforceable against the debtor, details about the debt, interest accrued, additional costs and details of the creditor.

5) CRAR can only be exercised if the outstanding debt, less interest due under the lease, VAT and any set-off a tenant is entitled to make, exceed the minimum amount of 7 days' rent.

6) The certified Enforcement Agent who is exercising CRAR can only take goods belonging to the debtor - this excludes any items or goods which are necessary for the debtor's personal use or in connection with employment, business, trade, profession, study or education up to an aggregate value of £1,350.

7) The agent can only take goods up to the value of the debt plus costs.

8) The Enforcement Agent must wait at least 7 clear days before selling the goods and they must also notify the debtor giving them 7 clear days’ notice.

9) The Enforcement Agent can enter any other 'relevant premises' without a warrant - these are premises where the debtor lives or carries out business.

10) Should there be a sub-lease in place, the superior landlord may serve notice on the sub-tenant requiring them to pay their rent direct to the superior landlord.

Should you have any questions relating to CRAR, or if you are a landlord wanting more clarity on what these changes will bring, please call us on 0845 370 7401 or email me.

www.ableinvestigations.com/crar

The Enforcement Act 2007 - April 2014 sees revolutionary changes to current Bailiff Law

The Enforcement Act 2007

April 2014 sees revolutionary changes to current Bailiff Law

This month we discuss the much talked about changes to Part 3 of the TCE Act 2007, expected to be enacted in April 2014.

There are several changes which will require close attention from enforcement agencies - there have also been a number of significant changes in ethos between the old law and the new Act and Regulations.

Here are some of the most notable changes.

Taking Control of Goods - This is the new term to replace 'levying' and the procedure has been simplified with only one stage to seizure and impound goods - there are also more methods included for 'taking control of goods'.

Notices - There will be a new requirement for bailiffs to provide successive notices to debtors as the enforcement process progresses - in essence the bailiff has a duty to keep the debtor informed at all stages of the process.  Failure to do so could result in making subsequent stages of the process invalid.  This will also add costs and take more time, something the enforcement agency will need to absorb.

Binding Effect of Warrants - This is already in place for county court bailiffs and HCEOs but will now apply to all bailiffs.  The binding effect begins either when a warrant is issued or when the enforcement notice is issued, depending on the debt involved - any form of assignment or transfer of goods will not prevent the bailiff from carrying out the enforcement.

Entry - Entry into a premises will only  be possible by the usual means of ingress - this would include doors, gates and similar entrances.  This does not include climbing through windows, climbing over walls, climbing over fences, lifting floorboards, climbing over a locked gate or barrier.

Clamping of Vehicles - For the first time this will be permitted by legislation - a Bailiff also now has the
power to secure goods on premises by locking them away in a room or cupboard or by securing the entire premises.

Goods - There is now a more detailed and comprehensive list of exempted goods, particularly for household goods and assets used for or by a sick or disabled person, which are now strictly protected from seizure.  'Tools of the trade’ now include items required by students, amongst others.

Third Party Claimants - If goods have been seized which belong to third parties, there now exists a formal court procedure for that person to register their claim and to seek a court order for the restoration of their property.

Valuation of Goods - Any goods that are removed from premises for storage or for sale, must be valued by the enforcement agent and a copy of the valuation must be provided to the debtor and any co-owner.

Sale of Goods - Goods can now be sold using a much wider range of methods, other than just public auction.  This should ultimately help as it will ensure that the best price possible is achieved.

These changes may allow enforcement agencies to charge higher fees for their work, but this is coupled by higher risk and an increased duty of care.

This may also require a greater level of training on behalf of the bailiff's as it will insist that due care is taken when following procedure, they will need to be accurate in their paperwork and possess a greater understanding of the law that governs their profession

Over the coming weeks we will release a full and detailed breakdown of the new changes due to take effect in April 2014 - we will also release updates as and when they are released.

To have a copy of these emailed directly into your inbox please register here

Clampdown on Councils

Clampdown on Councils - New guidelines to protect the people

Recently, Eric Pickles set out new plans to tackle two ongoing issues that have arisen through the use of bailiffs by councils.

The new guidance has been introduced following the debate in the House of Commons by Lord Lucas - this was surrounding the issue of local authorities receiving kick-backs from bailiff companies as first highlighted in the 'Harrow Council and Newlyn Plc' case in summer 2011.

The new guidelines for councils set out;

• Councils should no longer be collecting ‘contractual kickbacks’ from bailiffs - there also needs to be more protection for the public against aggressive bailiffs, unreasonable charging orders and 'phantom visits'.
• Councils must be sympathetic to those in genuine hardship – they need to be proportionate in enforcement and not overuse bailiffs.
• Councils must take individual circumstances into account before proceeding with action against bill payers - there is even a suggestion that non-fee charging debt advisor's could be used to help develop their enforcement strategies.

Over the last five years, it was reported by the Citizens Advice that there had been a 38% increase in complaints about private bailiffs.

Citizens Advice Chief Executive Gillian Guy said; "A third of the bailiff problems we help with each year are for council tax debt. We see cases where bailiffs overstate their powers, act aggressively and bump up debts by levying excessive fees and charges.”  

“Local authorities must protect people from bailiffs who flout the law by helping people early on who are struggling to pay their council tax. We urge councils to sign up to our protocol for dealing with council tax debt."

The new guidance is crystal clear - stop the dodgy practices where town halls collect contractual kickbacks from bailiffs that will do almost anything to make money.

Once a payment becomes overdue, the council should send the bill payer at least three statutory communications before further action is taken, these are;

• Reminder for payment
• Court summons
• Notification that the liability order has been granted and unless the amount owing is paid, bailiffs are likely to follow

At each stage, full information must be provided by the local authority on what the bill payer can do to avoid this course of action and where they can go for help and advice.  They must be clear about the next steps. 

Charges for the court summons and for liability orders should be clear on all documentation with clear information on how they can be paid and how they will be collected if not. 

Local Authorities are reminded that they are only permitted to charge reasonable costs for the court summons and liability order. In the interests of transparency, Local Authorities should be able to provide a breakdown, on request, showing how these costs are calculated. 

A local Authority should take all reasonable steps to exhaust other options available to them prior to obtaining a liability order.

In the cases of ‘phantom visits’ and excessive fees for simply putting a letter through the door, these should be grounds for the termination of the contract and should be reported to the Police for fraudulent activity.

It is no longer appropriate for councils to receive a kick-back from the use of bailiffs and the charging of fees - contracts should not involve rewards or penalties which incentivise the use of bailiffs where it would not otherwise be justified.

There are other protections which have also been included;

• The bailiff must provide the debtor with a contact number should they wish to speak to the billing authority
• The local council remains responsible for the action of bailiffs they have engaged
• The standard scale of fees must be published on the council's website to allow public scrutiny and highlight unreasonable practices

These changes have been welcomed by civil liberties group Big Brother Watch.

Director Nick Pickles said: “It is clear that in the past there have been too many cases where bailiffs have been a law unto themselves, ­barging their way into people’s homes, intimidating ­vulnerable members of the public and imposing rip-off charges.

Personally, I think that it is about time that the councils took more responsibility for the Bailiffs they employ. There are many companies who operate a very professional and ethical business, yet still in today’s age most bailiffs are self-employed sub-contractors, so if they don’t get the fees then they don’t get paid, which is why some of overly aggressive.

Those interested in finding out more what Able Investigations and Enforcement can offer, can contact me, Steve Wood on 0800 6444 181 or e-mail; steve@ableinvestigations.com  alternatively visit - www.ableinvestigations.com

Quarter Day has Passed

With the recent passing of quarter day, any rent that wasn't paid on time would have fallen into arrears the following day - under Common Law, the landlord is entitled to take action by seizing goods to recover any rent arrears, however, some landlords will make an arrangement for the payment of the rent, thus allowing the tenant to remain in the premises and prevent the seizure of the assets.

Should the tenant then default on the agreed terms, the landlord is entitled to take enforcement to obtain payment, even sell the assets - this is called protective distraint.

Note – distraint for rent does not permit the enforcement officer to attend any other premises where goods belonging to the tenant may be found, the distraint only applies to the premises covered by the rent agreement.

All of this is done by instructing a Certificated Bailiff to collect the payment, or seize the goods on his behalf.

It is normally the case that when a Bailiff seizes the goods he does so under a walking possession order, allowing the tenant to continue to trade on the proviso that anything sold must be replaced, like for like, within twenty-four hours.  If the tenant falls to replace the items and fails to pay his outstanding rent, the landlord can demand two & half times the rent value from the tenant.

Another option would be to instigate a peaceful possession procedure; the landlord, agent or solicitor only need instruct a Certificated Bailiff to act on their behalf.  This is an effective method if the officer cannot levy distress due to them not being able to gain entry, there are insufficient goods to seize or all goods belong to third parties.

If you are ever stuck, need a little advice or simply need some clarity on any matter relating to rent recovery please do give us a call, we’d be happy to help where we can.

Five things to consider when selecting your Server of Process

A guide to finding the right Process Server for your particular business needs

Working with a reliable Server of Process can be vital to the success and reputation of your own business, you need to be confident that they are reliable, knowledgeable and that you are paying the right price.

So how do you make sure that the company you appoint is right for your particular business?

5 Questions to ask

• Are they an Accredited Process Server - An accredited Process Server would do things like check the papers and notify you of any discrepancies before attempting to serve them:  others simply offer a 'delivery service'.
• What is their success rate - This can vary from company to company, if they can't tell you confidently what it is then probably best to avoid them:  you are looking for a high success rate, anything over 85%.
• How long will it take - The standard time will be 7-10 days to make the first attempt whilst most can offer a 'Same Day' or 'Rush' service: this may cost more with some companies so best to check.
• How many visits will they make - Some of the cheaper options may only include one visit:  a reputable company should offer to make up to three visits for their fixed fee.
• What type of reporting do they provide - If you require any reporting ready to submit for legal proceedings, make sure they are capable of providing this: always check as to whether this is included in their fees or if it will incur additional charges.

What should you expect to pay?

 

On carrying out some research, it seems to range from £50 to £125, depending on the size and reputation of the company.

That said, some firms are charging £325 plus VAT for a 'Same-Day' service:  whilst they claim to be more highly qualified than your average Bailiff or Process Server, these fees are totally unacceptable.

Some charge a fixed fee but charge extra for preparing and swearing an Affidavit of Service or for completing a Certificate or Statement of Service: most will include this as part of their fee or offer it as free.

I hope this helps you in some way.

Regards,
Steve Wood
 

If you would like to ask a question relating to the Serving of Process, or if you have a case that you would like resolved quickly and efficiently, please call us on 0845 3707 401 or e-mail me; steve@ableinvestigations.com - we'd be more than happy to help.

'No Find No Fee' Tracing - The Truth

We were recently contacted by a solicitor who had fallen victim to one of the ‘no find no fee’ tracing services being advertised online – you may have seen or even considered using them yourself.

After a period of time the agency in question provided an address, however, after writing to the individual it was returned to the solicitor as 'address unknown', leaving them back at square one.

This is a common occurrence - in fact we receive at least one call each week from a client with a similar story of an unsuccessful trace through using these cheaper alternatives.

So what’s the difference - do you get less bang for your buck?

The Truth

The 'no find no fee' agency will normally carry out only one trace enquiry and will operate over e-mail, meaning that you don’t actually deal with a real person.

The length of time usually quoted to find the person will be between 5-10 working days.

If they can’t find them, that’s it.

The reputable agency will have access to systems that others don’t, meaning that if someone is able to be found we can find them, quickly.

We are able to do this as we have access to Data Protection Act compliant consented data on over 99% of the population - this allows us to fill in the gaps between all of the other widely available commercial databases, statutory data as well as data that is in the public domain.

Using a multitude of systems we are normally able to trace someone within a few hours of being instructed – only on the rare occasion are we unable to trace an individual which is evident in our 98% success rate.

Our background as private investigators helps with this - unlike the cheaper options we have a wealth of ‘real world’ experience meaning that we can often spot patterns, trends and tricks that people use in order to not be found.

In the unlikely event of us not being able to trace the person at the first time of asking , we offer to carry out a further trace enquiry three months later…at no additional cost.

Anybody can be found, even those that don’t appear on the electoral role, utility databases or are registered as home owners or tenants.

Reporting - Getting it right first time

The other main point of difference is the supporting information provided once we have located the individual in question.  Our reports are not just one-liners, they will include;

• Current and previous addresses for the individual
• The process and systems we have used to trace them
• A report on why we believe they are there
• They are also presented to the standard needed to submit in civil and criminal proceedings.

This detailed information can help our clients serve process quickly and effectively, meaning a quicker resolution.

It’s not just absconding debtors that we are asked to find either – locating missing children, witnesses or even finding lost relatives are all common requests for our Tracing team.

Our standard fixed fee for an individual trace is £125 plus vat but we also offer volume discounts on anything over 5 cases per month.

If you would like to ask us a question on Tracing or if you have a case that you would like resolved quickly and efficiently, please call me on 0845 3707 401 or e-mail me; steve@ableinvestigations.com - we'd be more than happy to help.

December 25th is Quarter Day - Are you ready?

Quarter days were traditionally the days when rents were due, servants were hired and the local magistrate would visit outlying areas to hand out their justice.

Whilst some newer commercial leases use the first day of the quarter for ‘quarter day’, the traditional English quarter days are on March 25, June 24, September 29 and December 25^th.

With the next quarter day imminent, any rent not paid by this date will be in arrears one day after this date.

Should this happen, the landlord is entitled to take enforcement action to obtain payment by instructing a Certificated Bailiff to collect the payment, something that dates back to the Middle Ages!

How to get your hands on the rent…quickly and easily

The fastest and simplest way to distrain for rent is by using a Certificated Bailiff.  Under Common Law, if the tenant has not paid the rent by the due date then the landlord is entitled to take action by seizing goods to recover any rent arrears.

The landlord may however, make an arrangement for the payment of the rent thus allowing the tenant to remain in the premises and prevent the seizure of the assets.  Should the tenant then default on the agreed terms, the landlord is entitled to sell the assets.  This is called protective distraint.

Note – distraint for rent does not permit the enforcement officer to attend any other premises where goods belonging to the tenant may be found, the distraint only applies to the premises covered by the rent agreement.

It is normally the case that when a Bailiff seizes the goods he does so under a walking possession order, allowing the tenant to continue to trade on the proviso that anything sold must be replaced, like for like, within twenty-four hours.

If the tenant falls to replace the items and fails to pay his outstanding rent, the landlord can demand two & half times the rent value from the tenant.

Another option would be to instigate a peaceful possession procedure; the landlord, agent or solicitor only need instruct a Certificated Bailiff to act on their behalf.  

This is an effective method if the officer cannot levy distress due to them not being able to gain entry, there are insufficient goods to seize or all goods belong to third parties. 

If you are ever stuck, need a little advice or simply need some clarity on any matter relating to rent recovery please do give us a call, we’d be happy to help where we can.

From all the team at Able, Merry Christmas and we hope you have a prosperous New Year.

Steve Wood

 Able Investigations and Enforcements - 0845 3707 401

www.ableinvestigations.com