Judges Demand

Can you seize a vehicle to repay commercial rent under Common Law?

Published On: 4th July 2013

If the commercial property in question is covered by a lease, then the landlord may choose to use the Common Law of distress for rent (also known as distraint) to seize items belonging to the tenant, provided the tenant is in arrears with his rent.

Distress for rent
Distress for rent is normally undertaken by a Certificated Bailiff. Provided the goods are not exempt from seizure, then any goods on the demised premises may be seized and sold to recover the amount owed. If any goods belonging to third parties are seized, the third party must submit a written declaration of ownership to the landlord, stating that the goods are exempt from seizure.

If the landlord believes that there are other assets belonging to the tenant stored elsewhere, he will need to take court action to obtain a judgment in order to be able to seize those.

Seizing vehicles
So, what about the case of a company van, for example, parked outside the office or warehouse of the limited company tenant?

A van belonging to the tenant is definitely seizeable when enforcing a judgment – providing that the tenant is not a sole trader who has exclusive use of the van and can demonstrate it is exempt as a tool of the trade.

However, if the landlord is using the Common Law remedy of distress for rent, it will depend on whether the land where the van is parked forms part of the demised premises.

Demised premises
The term “demised premises” means the property covered by the lease. It will normally be clearly defined in the lease, especially if the lease contains clauses relating to maintenance and repair that needs to be undertaken by either party. The demised premises may cover the interior only, or the interior plus the exterior walls. In some cases, it may also include land, such as a car park.

However, if the land where the van is parked is not included in the definition of the demised premises, then the van may not be seized or removed under Common Law.

If the landlord claims the lease does include the land, the Certificated Bailiff would be well advised to make sure this is the case, before applying wheel clamps!

But, when the vehicle is unequivocally parked within the demised premises, for example in a loading bay, then it can be seized.

CRAR
The Common Law remedy of distress for rent will be replaced by CRAR – Commercial Rent Arrears Recovery – when Part 3 of the Tribunals and Courts Act 2007 is brought into force. We believe this is likely to happen in 2014.