Commercial rent arrears recovery

Commercial rent arrears recovery legislation aims to overhaul the ways in which landlords of commercial properties can recover outstanding debts from their tenants.

The commercial rent arrears recovery legislation means that landlords must give their tenants seven days’ notice before taking action. The concern for landlords is that this gives tenants the opportunity to put their high value goods out of reach of the bailiffs. 

A landlord can take the case to court, and request a shorter notice period, if they can present a viable case that the tenants are likely to remove their valuable assets from the property before the commercial rent arrears recovery is exercised. 

Additionally, a tenant can challenge the commercial rent arrears recovery notice, and if they are successful, the landlord may be told that the recovery cannot take place without the permission of the court. 

loading staff

There are other potential areas for concern for landlords when it comes to commercial rent arrears recovery, including:

  • Commercial rent arrears recovery is not available to landlords who let premises which include residential premises as part of the same lease. This could include leases of public houses, shops with flats on the upper floors, etc. Landlords should ensure that the residential part of their property has a separate lease wherever possible.
  • The premises must be let under a written lease, so landlords with informal arrangements cannot use commercial rent arrears recovery.
  • The rent arrears must amount to at least seven days’ unpaid rent.
  • Only rent can be recovered in this way; service charges or insurance rent are not covered by commercial rent arrears recovery, even if they are reserved as rent under the lease.
  • Landlords can only seize goods owned by the debtor. Goods used for the tenant’s personal use, or their business/profession, are exempt up to a total value of £1,350.
  • Only goods up to the value of the rent arrears can be seized.
  • At least seven clear days’ notice must be given before any sale of the seized goods takes place, unless the delay would make the goods unsalable or substantially reduce their value.
  • Landlords with sub-tenancies can also give 14 days’ notice to the sub-tenant to instead pay rent to the landlord.

Stephensons commercial litigation team specialise in commercial rent arrears recovery. If you need expert help and advice regarding the recovery of rent arrears, contact Stephensons today. Call us on 0203 816 9303 to speak to a member of our specialist commercial property law team. 

8.7 out of 10
Trustpilot logo4-stars on trustpilot Based on count 378

We're Great

It is our business to deliver legal services that work for our clients, and you can trust our specialists to take care of things on your behalf.

Our Trustpilot reviews

We cannot speak highly enough of this company, we would not hesitate to use them again in the future, which seems likely, and would recommend Stephensons to anyone seeking a top rate service.
View from a commercial property client

Bribery case has implications for firms of all sizes

In a case which is the first of its kind and has implications for companies of all sizes, a small interior design company has been convicted under ‘failure to prevent bribery’ legislation.   The court was told that a former director of...

Read more

Twitter commercial

Third win in a row for Stephensons at prestigious conveyancing awards

For the third consecutive year, the national law firm Stephensons has been named the winner of the Best Marketing, Website and Social Media category at the LFS Conveyancing Awards. The awards, which were held on September 19th at the VOX Conference...

Read more

Commercial property reorder

  • David Baybut
  • Kate Bullen
  • Jonathan Chadwick
  • ​Chris Graves
  • Louise Hebborn
  • Julie Ball
  • Paul Davies
  • Jonathon Waterhouse
  • Jessica Charnock
  • Gary Jackson

We're always here for you

As an award-winning top 150 law firm, with over 450 staff based in offices across the country, you're never far from the advice you need.

Find your nearest Stephensons office and arrange a meeting

As an award-winning top 150 law firm, with over 450 staff based in offices across the country, you're never far from the advice you need.