Rent arrears legislation is overkill, warns LSH

CHANGES to rent arrears legislation, which are likely to be announced this month, will damage the interests of occupiers, warns Lambert Smith Hampton (LSH).

Ben Hooker, central regional head of property management at the property consultancy described the changes as “a sledgehammer to crack a nut”.

The Commercial Rent Arrears Recovery (CRAR) regime, enacted under the Tribunal, Courts and Enforcement Act (TCEA) 2007, proposed a dramatic rent arrears power-shift toward occupiers. However, it was never formally brought into force, meaning landlords can still instruct a bailiff to enter the premises of an occupier in arrears and ‘levy distress’ on the occupier’s goods.

But with the Government expected to publish the results of the latest public consultation on CRAR this month, this may change.

Hooker said: “It appears likely that the old law, as it affects rent arrears, will be superseded by CRAR. Landlords may still instruct bailiffs to enter a property and seize goods but it incorporates some ominous changes.”

These could include it being enforceable only after seven days’ rent arrears become due and landlords having to give 14 days notice of enforcement.

“This is sledgehammer to crack a nut, enabling the occupier to remove and/or dispose of assets or use part of the property as a dwelling in order to frustrate the intent of the law,” Hooker said.

“If brought into force, landlords may raise the stakes by increasing rent deposits, seeking occupier contributions towards working capital or tightening lease conditions on service charge arrears.

“These actions will do occupiers no favours whatsoever.”