If you have tenants who have experienced problems with debt without taking steps to resolve the outstanding issues with their creditors, then there is a realistic possibility that bailiffs may be issued to reclaim what is owed from your property.
Bailiffs are used when tenants owe money to creditors and have not responded to their requests for repayment, or have ignored any other proceedings, such as a County Court Judgement. Tenants should receive reminders and warnings that bailiff action is being sought against them prior to their visit, which will offer them the opportunity to pay off their debt and stop any further proceedings.
Knowing tenant’s rights
The impending visit of a bailiff can be daunting for your tenants, especially if they are unsure on what powers they are able to exercise.
It is imperative that we are all aware exactly what bailiffs are allowed to do, and perhaps most importantly what bailiffs are not allowed to do; this will give an insight into what you can expect and also protect tenants from any untoward behaviour that should not be tolerated.
Key points to consider – what are bailiffs allowed to do?
- Forcing entry
Forced entry can be a concern for a lot of people when they are facing a visit from a bailiff, and particularly for landlords concerned about damage to their rental property. The law stipulates that bailiffs usually cannot force their way into a home; this is only allowed as a last resort when collecting unpaid criminal fines, tax or VAT. The only other circumstance where bailiffs can force entry is when they have already agreed with the tenant what goods to seize and return to collect them at a later date and are not granted access.
Legally, tenants do not have to answer the door to a bailiff, but they will return and tenants will be charged for each time that a bailiff is issued- so ignoring the problem could just further increase their debt. If a bailiff finds an unlocked door or window, they are allowed to use it to gain access to the property by what is referred to as “peaceful entry”. If they do not wish to allow a bailiff access to the property, it is recommended that they ensure that the property is secure and address the bailiffs in a polite and business-like manner through a locked door.
- Items being seized
Bailiffs will seize items from their home to be sold to cover the costs of the debt that they owe. This can include their car and any luxury items such as jewellery and electronics. There is a list of protected items that bailiffs cannot take, which includes clothing, children’s belongings and tools needed for work.
Each item needs to be individually valued by the bailiff to ensure that they only take items that will sufficiently cover the costs of the outstanding debt, and nothing more. If a tenant believes that the bailiff has taken goods that they shouldn’t have, they can file a complaint with the body who issued the bailiffs; for example, the High Court or the private repossession company. Once items have been identified to be seized, tenants cannot damage, sell or remove them – if they do, they will be in contempt of court.
To remove the seized items from the property, the bailiffs will often ask tenants to sign a “walking possession” agreement – this means that they agree for the ownership of the specified items to be transferred to the bailiffs, and they can then return to collect them at a later date. If tenants refuse to sign this agreement, the bailiffs can remove the items there and then.
The government has recognised that the behaviour of some “rogue” bailiffs has tarnished the reputation of the trade, and new legislation needs to be brought into effect to tackle this. As of 2014, bailiffs will be unable to use physical force or intimidating behaviour against debtors, and will not be able to visit properties late at night or at a time when only children are present. Bailiffs will also be unable to charge their own fees and will have to stick to a fixed rate scale.
These changes have been put forward to protect vulnerable individuals, which often is the case when dealing with unresolved debt. An improved regulation of behaviour should enable a more transparent view on bailiff rights and provide a certain level of protection and peace of mind the debtors.
Ultimately, if your tenants stay out of debt or take steps to remedy debt already incurred, they should be able to avoid dealing with bailiffs. There is advice available that may be able to help them if they are concerned about bailiff action against them, and what power can be used in your case.
We recommend that landlords raise this awareness with tenants so that these laws are more transparent throughout, therefore dealing with much less problems along the line.
Josh Nichols is a full-time investor and financial writer; focusing on the property market, getting out of debt and investing in stocks & shares. You can follow him on Twitter here.