Distress, Distraint and Termination
How A Bailiff Can Assist The Landlord
WHAT WE OFFER
Seizure of the tenants goods and chattels to the extent that it covers the overdue rent and cost. The three different types of seizures that are most frequently carried out are:
Walk In Seizure: This is the most frequently taken action. In this instance we go to the premises and negotiate settlement of an account. All goods on the premises (to a maximum amount of the overdue rent and cost) are put under seizure and inventoried. The tenant signs a Bailee’s undertaking (Attached for your reference) stating that all goods and chattels will not be removed from the premises. This action is only taken when an agreement has been reached with the tenant for the full payment plus bailiff cost and agreed to by the landlord.
Lock Change (with tenant’s permission): This action is taken when the bailiff and the landlord feel that the goods distrained are in jeopardy of being removed from the premises. For instance, this could happen if another creditor was involved or if there is little chance of the tenant being able to clear the distress action. This gives the tenant time to arrange for the payment of the arrears and cost without incurring the expense of removal and warehousing. We use this action in combination with the walk in seizure. If the tenant fails to meet his obligations we can change the locks and sell the goods from the premises saving the cost of removal. The bailiff can’t deny reasonable access to the tenant under this arrangement. If this is done, it could be classed as a lease termination and seizure can’t continue. This action should only be done after discussion with your legal counsel.
Removal of Goods: This action is taken when there can be no settlement of the account between the Landlord and the Tenant and the tenant will not sign the permission to change the locks. We also use this action to take key pieces of the tenant’s goods such as trucks, forklifts or other articles that secure the landlord but allow the tenant to continue to operate. This is definitely the most expensive type of distress action and one that is used least often.
In all 3 of the seizures the bailiff must provide the tenant with the following:
- Notice of Seizure clearly listing the goods and chattels placed under seizure by the bailiff.
- A copy of the Distress Warrant clearly showing the amounts demanded including all costs of the action.
- These can be left with the tenant or his representative or clearly posted for the tenant to view if not given directly to the tenant.
What Information A Bailiff Requires
The following information, when given to the bailiff, will assist him in preparing the Distress Warrant and help him when discussing the distraint with the tenant.
- Copy of the front page of the lease giving the correct legal identities of the Landlord and Tenant.
- Complete statement of account showing how the arrears were derived. (If the arrears are for taxes or CAM make sure the lease classes these items as rent or additional rent.)
- A copy of the demand letter, if sent. (Check your lease to make sure that a demand letter is not required if sending in the bailiff without first issuing a demand.)
- A copy of the demand letter sent to the bank, if so required. Many financial institutions require notice of tenant’s default prior to you distraining or terminating.
- A copy of any PPR searches or charges that you might be aware of.
Termination vs. Distress
If the tenant has spent a considerable amount of funds installing specialized TI’s (built-in fridge/freezers, specialized electrical or ventilation systems, etc.), a lease termination can be very effective as well. It would cost the tenant more to remove these goods than to deal with the landlord’s overdue rent. Once the rent and costs have been paid, the lease can be reinstated.
If most of the tenant’s goods appear to be charged by a financial institution, or you see Revenue Canada (deemed Trust claim) or a charge by Provincial Sales Taxation, termination might be a better action to consider. A distress can be started and later abandoned if no results are forthcoming.
If the tenant deals in goods that are an environmental hazard it would be better to terminate than to have to deal with the sale of some of these assets. It would be the tenant’s responsibility to remove these assets from the site. This should only be done after discussion with your legal counsel
Accurate Effective Bailiffs
We are committed to insuring that every client’s account has been managed to a logical conclusion in a timely and cost effective manner.
We will remain one of the top performing Bailiff Companies in Canada and will continue our successful relationships with companies such as yours.
You can come by and visit us at our location:
6139 Trapp Avenue
Burnaby, British Columbia
Monday to Friday:
9:00AM - 5:00PM