Reform of Bailiffs Powers (6 April 2014)

The current law relating to enforcement by the seizure and sale of goods is complex and there are different types of bailiffs depending on the type and size of the debt. Currently there is no set training standards for bailiffs and reform has been in discussion for years to clarify the law and to regulate the industry.

Under the new legislation, bailiffs will now be officially known as enforcement agents. They will be banned from entering homes at night and will only be allowed to visit debtors between 6am and 9pm. They will also no longer be allowed to enter homes when only children are present.

Enforcement agents will have to be trained and certified before they can work and could be barred if they do not follow the rules. The rules will clearly detail what goods they can take and they will be prohibited from taking household essentials such as cookers, microwaves, fridges and washing machines. They will also have to give seven days notice before taking possessions, unless they have specific permission from a court.

The Ministry of Justice will also bring in fixed costs and end the enforcement agent’s ability to add excessive charges to the amount debtors have to pay. These new laws will be added to the Crime and Courts Bill.

Commercial landlords and tenants should also note the new regulations on debt enforcement by bailiffs.

Under the new rules, the common law of distress for rent arrears will be replaced by Commercial Rent Arrears Recovery (CRAR). Currently the law allows bailiffs to seize and sell goods to recover rent arrears without notice. Under the new rules commercial landlords will only be able to recover unpaid rent via enforcement agents, but not service charge, insurance and other monies under the lease. Tenants will benefit from a seven day notice before the enforcement agent arrives. This will mean that landlords are left with a longer and more expensive process. This could also lead to tenants disposing of assets before the enforcement agent arrives.

The new rules outlined above come into effect on 6 April 2014.

As a result the whole process should be simpler and more transparent. It will be interesting to see how the new legislation will affect the recovery of debts and whether these changes will put more emphasis on appointing an independent regulator in this area.

If you have any questions regarding recovery of a debt or issues concerning commercial rent please contact Daniel Pidgley at daniel.pidgley@ellisjones.co.uk.