Commercial properties with a residential element attached created an unforeseen consequence when the Tribunal Courts & Enforcement Act 2007 (“the Act”) came into force in 2014.
Prior to the commencement of the Act bailiffs (now enforcement agents) could be sent in to commercial properties and goods could be levied upon and removed to cover any outstanding commercial rent debts, or even where appropriate, a forfeiture of the commercial property could be carried out. However when it became law it put a complete stop to this where there is a residential element.
From the introduction of the Act in April 2014 the act stipulated that any commercial lease agreement with a residential element could not be enforced using CRAR (Commercial Rent Arrears Collection). Additionally, under common law, a commercial unit with a residential element stops forfeiture taking place. This has resulted in a severe loss of income to many landlords and property management companies. Legal proceedings are now required.
Where a judgment for possession is obtained, the procedure for county court enforcement is drawn out with delays in some areas being up to or even in excess of two months. This is where there is a benefit for High Court enforcement to get involved. By reducing the time for enforcement using High Court enforcement it minimises the losses to landlords and property management companies.
It is therefore important at the time of obtaining Judgment that an application is made under section 42 of the County Court Act for transferring the case to the High Court for enforcement.
‘If a judgement is obtained for a possession order and monies owed another useful element to High Court enforcement under the Act is Schedule 12 which states:’
“Where the power is conferred by a writ issued from the High Court the writ binds the property in the goods from the time when it is received by the person who is under a duty to endorse it”. The bound property would, of course, cease to be bound on the payment of the outstanding debt.
By transferring the case for High Court Enforcement a Writ of Control binds the goods of the debtor, and in turn protects your Client / Creditor from other parties trying to collect monies owed. This is a useful tool to the collection of outstanding monies owed.
If further information is required on Commercial properties with a residential element please contact Penham Excel High Court Enforcement Officers on 033 000 20700