The implementation of Commercial Rent Arrears Recovery (CRAR), which will replace the law of distress, has taken a step forward. On 9 January 2014, new regulations (Taking Control of Goods (Fees) Regulations 2014) were made for enforcement agents to recover fees and disbursements for CRAR from debtors. There are three stages to the new process (set out in Schedule 12 to the Tribunals, Courts and Enforcement Act 2007) and the fees payable are:
1. compliance stage (instructing the enforcement agent and serving notices)
- fixed fee of £75
2. enforcement stage (all activities relating to enforcement up to but not including any sale or disposal of goods)
- for non-High Court matters: a fixed fee of £235 plus 7.5% of any sum to be recovered exceeding £1500, or
- for High Court matters: a fixed fee of £190 plus 7.5% of any sum to be recovered exceeding £1,000
3. sale or disposal stage
- a fixed fee of £525 plus a further 7.5% of any sum to be recovered in excess of: £1,500 for non-High Court matters; and £1,000 for High Court matters
As with bailiff’s fees for distress, the enforcement agent’s fees will generally be recoverable out of the sale proceeds of the seized goods along with expenses (such as court fees, storage costs and paying for locksmiths).
This is the second set of regulations brought out to make way for the introduction of CRAR. The first set of regulations (Taking Control of Goods Regulations 2013) established procedures for taking control of goods. A third and final set (on certification to work as an enforcement agent) will follow shortly. All three are due to come into force on 6 April 2014.
The original recommendation to abolish distress was published by the Payne Committee in 1969. It has taken 45 years to implement the proposal to change the law, which may be a record!