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Changes to debt collection rules could lead to more landlords having to go to court

By z4027672030, Oct 14 2015 11:05AM

As a result of new legislative changes coming into force from October 1, the current debt threshold at which creditors can serve a statutory demand is to rise from £750 to £5000. What this means for commercial landlords is that, in order to recover debts totalling less than £5000, they will now need to pursue court judgements and subsequent enforcement action.

While pursuing this type of action may be necessary in some circumstances, this move is seen by many as one which will drive up the costs of debt recovery. Claims such as these, like any claim under £10,000, are to be heard in the small claims court, meaning that the landlord is liable to pay all costs of bringing the case to court. Taking the claim to court can also make the recovery process a much lengthier one.

It is instead recommended that landlords take adequate preventative steps to reduce the risk of tenants falling into arrears with them and avoid having to claim back money owed through the courts. Increased demand for commercial premises means that landlords now have greater bargaining power, and are now able to take steps such as completing due diligence checks and demanding a larger initial deposit without compromising on letting out their property.

If you do unfortunately find that your tenant is in arrears and you need to carry out debt recovery, North Devon firm Taylors Solicitors are here to help. We can offer a free half hour initial consultation on the steps you need to take during the debt recovery process – contact us or visit our website to find out more.

Image: Torange.us, available under Creative Commons

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