Rent Arrears – Registration of Leases
Landlords can face particular difficulties if a tenant fails to pay rent or other sums due under the lease. A landlord may not wish to move too quickly to repossess the property. Even when the decision is made to repossess the court and other required procedures can take several months during which the debt may well continue to increase. Landlords will naturally be concerned by the costs involved in going to court, most of which may be irrecoverable.
AMA have had a high degree of success in recent times with an alternative method of recovering arrears by way of registering the lease for execution. Where a lease contains a clause consenting to registration for execution, that lease can be registered in the Books of Council and Session, a division of the Registers of Scotland. Once the Registers issue an Extract of the Registered Lease, that document is authority for Officers of Court to execute diligence to recover the debt.
On the cost side, registration of a normal domestic lease will usually cost between £15.00 and £20.00 as against several hundred for a court action. The extract is usually returned from the Registers within 7 days, again a huge time saving time wise as against court action.
We should point out that this form of registration does not enable landlords to evict their tenants. It does however authorise the service of a charge warning the debtor of potential future diligence, followed by an earnings arrestment or attachment og goods, like a vehicle, outwith their dwellinghouse. The extract also authorises arrestment of their bank accounts or any other money owed to them by a third party.
We would normally only recommend this course of action where the debtor’s place of employment or bank account are known. In these circumstances, going down the Registration route is a quick, inexpensive route to recovery. In addition, if the diligence is successful all officer fees are recovered from the debtor.
We are happy to offer advice on all aspects of this registration procedure. We can advise if the style of lease you are using is capable of being registered and put you in touch with solicitors who can revise that style of lease if necessary. We can also offer free advice on the best diligence to use. Finally, we can organise registration on your behalf.
Our success rate using this approach means we would recommend this as a possible course of action for all landlords.