When a tenant defaults on rent, one of the remedies open to commercial landlords is rent distraint. While landlords may know of the concept, the actual execution must be carefully handled. Otherwise, unwary landlords could easily see this self-help remedy turn into a double-edged sword rife with unintended and unfavourable consequences.
Distraint is surrounded by rules and restrictions, any of which, if ignored, could render it illegal in the eyes of the law. In this post, we examine one of the biggest mistakes that landlords must avoid when attempting to exercise their right to distraint.
Terminate Or Distrain, But Never Both At Once
Distress allows a landlord to seize and sell a tenant's good in order to pay for arrears of rent. Seems simple and ideal, but beware. Landlords can choose to either terminate the lease or to exercise distraint but not both.
Distress can only be legally exercised where the lease remains intact. In their haste, some landlords unknowingly engage in actions that effectively signify termination of the lease. Once this occurs, a landlord loses the right to distraint.
Picking Or Changing The Locks - Not An Option
One of the mistaken actions that landlords have at times taken is to pick or change the property's locks. Even if such action is purportedly for gaining access to the tenant's distrained goods, it opens the landlord to liability for forced entry and also equates to exercising the right to re-entry and thus termination of the lease.
Since distraint is typically carried out with the service of a bailiff, landlords must also be vigilant about the activities of the bailiff. Unlawful behaviour by the bailiff could similarly render the distraint illegal.
Although distraint has a long legal history, prudent landlords are wise to consider this "self-help" remedy a route best travelled in company with a legal advisor.