Commercial property update

Magnus Hassett looks at the forthcoming changes to the rules on recovery of commercial rent arrears, the introduction of a period of temporary rates relief for empty new build commercial property, and HMRC’s recent clarification of last year’s VAT changes, affecting landlords who let out property for storage purposes
The common law remedy of distraint for arrears of rent will finally be abolished on 6 April 2014, when the commercial rent arrears recovery procedure, originally proposed by the Tribunal Courts and Enforcement Act 2007, is brought into effect by The Taking Control of Goods Regulations 2013.

The right of a landlord to instruct bailiffs to seize goods (and sell them after five days if rent arrears are not settled) has been criticised by occupiers for many years, given that there is no requirement to give notice to a defaulting tenant and that it allows landlords who suspect a tenant may become insolvent to seize goods, outflanking other creditors. Landlords, on the other hand, see distraint as a quick and effective remedy, available within 24 hours, often with the intention of ‘shaming’ tenants (particularly retail tenants) into settling arrears.

Via Commercial property update.

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