Will new bailiff law have bad effect on property sector?
Published by Anonymous for 24dash.com in Housing and also in Central Government, Regulation
Will new bailiff law have bad effect on property sector?Image: Housing via Shutterstock
Property bigwigs are meeting today to discuss possible detrimental effects the new bailiff law may be having on the industry.
Following the implementation of the Ministry of Justice’s Commercial Rent Arrears Recovery (CRAR) programme in April, landlords no longer have a right of distress against tenants to recover outstanding rent arrears.
A landlord must sign notification documents and give a tenant seven clear days' notice of intended enforcement action.
Despite concerns that commercial landlords would be left out of pocket as tenants may abscond with goods when given seven days' notice, commercial landlord Capital & Regional has found CRAR to be effective in its first quarter.
Determined to explore the issue, commercial property landlords, debt recovery specialists, insolvency practitioners and the government will come together today at a British Property Federation seminar to discuss whether the new law is having a negative effect on the commercial property industry.
John Cook, Revenue Manager at Capital & Regional, said: “Reform of Bailiff law has been discussed and promoted by successive Governments for many years, and we understood the need for reform. CRAR gave us cause for concern though, in particular around the requirement to give Notice. However, fears of tenants absconding with goods have not been realised, and by ensuring our tenant customers are familiar with the new procedures, recurring late payment cases have been reduced. CRAR has so far been a successful remedy for us”.
Debt recovery specialists the D2 Group have monitored the last three months however, and found that since CRAR was implemented in April, 21% of warrants were returned as unrecoverable. It was further concerned to see that the premises of 63% of these unrecoverable warrants were reported as void or empty.
Rupert Atkinson, sales director, The D2 Group, said: “Prior to the commencement of CRAR the D2 Group engaged with a number of property professionals to explore the operational changes to their business and timings in which CRAR would be instigated. It is apparent from our research post 6th April that clients are issuing Warrants of Control earlier after Quarter Day in order to factor into the cycle, the seven day Enforcement Notice.”
Research from the D2 Group also shows that in February 2014, 67% of randomly selected commercial managing agents were unaware of the pending legislative changes.
The seminar will address whether the new legislation has been sufficiently understood by the commercial property industry, and how this might be improved if not.
Liz Peace, chief executive of the British Property Federation, said: “We hope that today’s discussion creates a good base to establish how effective CRAR has been so far. Having all parties affected by the new law discuss the subject together is the best way to establish an open dialogue, identify where problem areas might be, and decide how to best tackle them.”