Tribunals, Courts and Enforcement Bill [HL]

House of Commons

Session 2006 - 07
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Tribunals, Courts and Enforcement Bill [HL]

Tribunals, Courts and Enforcement Bill [HL]
Part 3 — Enforcement by taking control of goods
Chapter 2 — Rent arrears recovery
48

71
Rent
(1)
“Rent” means the amount payable under a lease (in advance or in arrear) for
possession and use of the demised premises, together with—
(a)
any interest payable on that amount under the lease, and
(b)
any value added tax chargeable on that amount or interest.
5
(2)
“Rent” does not include any sum in respect of rates, council tax, services,
repairs, maintenance, insurance or other ancillary matters (whether or not
called “rent” in the lease).
(3)
The amount payable for possession and use of the demised premises, where it
is not otherwise identifiable, is to be taken to be so much of the total amount
10
payable under the lease as is reasonably attributable to possession and use.
(4)
Where a rent is payable under or by virtue of Part 2 of the Landlord and Tenant
Act 1954 (c. 56), the amount payable under the lease for possession and use of
those premises is to be taken to be that rent.
(5)
This section applies for the purposes of this Chapter except sections 66 and 80.
15
72
The rent recoverable
(1)
CRAR is not exercisable except to recover rent that meets each of these
conditions—
(a)
it has become due and payable before notice of enforcement is given;
(b)
it is certain, or capable of being calculated with certainty.
20
(2)
The amount of any rent recoverable by CRAR is reduced by any permitted
deduction.
(3)
CRAR is exercisable only if the net unpaid rent is at least the minimum amount
immediately before each of these—
(a)
the time when notice of enforcement is given;
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(b)
the first time that goods are taken control of after that notice.
(4)
The minimum amount is to be calculated in accordance with regulations.
(5)
The net unpaid rent is the amount of rent that meets the conditions in
subsection (1), less—
(a)
any interest or value added tax included in that amount under section
30
71(1)(a) or (b), and
(b)
any permitted deductions.
(6)
Regulations may provide for subsection (5)(a) not to apply in specified cases.
(7)
Permitted deductions, against any rent, are any deduction, recoupment or set-
off that the tenant would be entitled to claim (in law or equity) in an action by
35
the landlord for that rent.
73
Intervention of the court
(1)
If notice of enforcement is given in exercise (or purported exercise) of CRAR
the court may make either or both of these orders on the application of the
tenant—
40
(a)
an order setting aside the notice;

Tribunals, Courts and Enforcement Bill [HL]
Part 3 — Enforcement by taking control of goods
Chapter 2 — Rent arrears recovery
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(b)
an order that no further step may be taken under CRAR, without
further order, in relation to the rent claimed.
(2)
Regulations may make provision about—
(a)
the further orders that may be made for the purposes of subsection
(1)(b);
5
(b)
grounds of which the court must be satisfied before making an order or
further order.
(3)
In this section “the court” means the High Court or a county court, as rules of
court may provide.
74
Use of CRAR after end of lease
10
(1)
When the lease ends, CRAR ceases to be exercisable, with these exceptions.
(2)
CRAR continues to be exercisable in relation to goods taken control of under
it—
(a)
before the lease ended, or
(b)
under subsection (3).
15
(3)
CRAR continues to be exercisable in relation to rent due and payable before the
lease ended, if the conditions in subsection (4) are met.
(4)
These are the conditions—
(a)
the lease did not end by forfeiture;
(b)
not more than 6 months has passed since the day when it ended;
20
(c)
the rent was due from the person who was the tenant at the end of the
lease;
(d)
that person remains in possession of any part of the demised premises;
(e)
any new lease under which that person remains in possession is a lease
of commercial premises;
25
(f)
the person who was the landlord at the end of the lease remains entitled
to the immediate reversion.
(5)
In deciding whether a person remains in possession under a new lease, section
69(2) (lease to be evidenced in writing) does not apply.
(6)
In the case of a tenancy by estoppel, the person who was the landlord remains
30
“entitled to the immediate reversion” if the estoppel with regard to the tenancy
continues.
(7)
A lease ends when the tenant ceases to be entitled to possession of the demised
premises under the lease together with any continuation of it by operation of
an enactment or of a rule of law.
35
75
Agricultural holdings
(1)
This section applies to the exercise of CRAR where the premises concerned are
an agricultural holding.
(2)
CRAR is not exercisable to recover rent that became due more than a year
before notice of enforcement is given.
40
(3)
For the purposes of subsection (2), deferred rent becomes due at the time to
which payment is deferred.

Tribunals, Courts and Enforcement Bill [HL]
Part 3 — Enforcement by taking control of goods
Chapter 2 — Rent arrears recovery
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(4)
“Deferred rent” means rent the payment of which has been deferred, according
to the ordinary course of dealing between the landlord and the tenant, to the
end of a quarter or half-year after it legally became due.
(5)
The permitted deductions under section 72(7) at any time include any
compensation due to the tenant in respect of the holding, under the 1986 Act or
5
under custom or agreement, that has been ascertained at that time.
(6)
In this section—
the “1986 Act” means the Agricultural Holdings Act 1986 (c. 5);
“agricultural holding” has the meaning given by section 1 of the 1986 Act.
Right to rent from sub-tenant
10
76
Right to rent from sub-tenant
(1)
This section applies where CRAR is exercisable by a landlord to recover rent
due and payable from a tenant (the immediate tenant).
(2)
The landlord may serve a notice on any sub-tenant.
(3)
The notice must state the amount of rent that the landlord has the right to
15
recover from the immediate tenant by CRAR (the “notified amount”).
(4)
When it takes effect the notice transfers to the landlord the right to recover,
receive and give a discharge for any rent payable by the sub-tenant under the
sub-lease, until—
(a)
the notified amount has been paid (by payments under the notice or
20
otherwise), or
(b)
the notice is replaced or withdrawn.
(5)
A notice under this section takes effect at the end of a period to be determined
by regulations.
(6)
Regulations may state—
25
(a)
the form of a notice under this section;
(b)
what it must contain;
(c)
how it must be served;
(d)
what must be done to withdraw it.
(7)
In determining for the purposes of this section whether CRAR is exercisable,
30
section 72 applies with these modifications—
(a)
if notice of enforcement has not been given, references to that notice are
to be read as references to the notice under this section;
(b)
if goods have not been taken control of, section 72(3)(b) does not apply.
(8)
In this section and sections 77 to 79—
35
(a)
“sub-tenant” means a tenant (below the immediate tenant) of any of the
premises comprised in the headlease (and “sub-lease” is to be read
accordingly);
(b)
“headlease” means the lease between the landlord and the immediate
tenant.
40

Tribunals, Courts and Enforcement Bill [HL]
Part 3 — Enforcement by taking control of goods
Chapter 2 — Rent arrears recovery
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77
Off-setting payments under a notice
(1)
For any amount that a sub-tenant pays under a notice under section 76, he may
deduct an equal amount from the rent that would be due to his immediate
landlord under the sub-lease.
(2)
If an amount is deducted under subsection (1) or this subsection from rent due
5
to a superior sub-tenant, that sub-tenant may deduct an equal amount from
any rent due from him under his sub-lease.
(3)
Subsection (1) applies even if the sub-tenant’s payment or part of it is not due
under the notice, if it is not due because—
(a)
the notified amount has already been paid (wholly or partly otherwise
10
than under the notice), or
(b)
the notice has been replaced by a notice served on another sub-tenant.
(4)
That is subject to the following.
(5)
Subsection (1) does not apply if the landlord withdraws the notice before the
payment is made.
15
(6)
Where the notified amount has already been paid (or will be exceeded by the
payment), subsection (1) does not apply (or does not apply to the excess) if the
sub-tenant has notice of that when making the payment.
(7)
Subsection (1) does not apply if, before the payment is made, payments under
the notice at least equal the notified amount.
20
(8)
Subsection (1) does not apply to a part of the payment if, with the rest of the
payment, payments under the notice at least equal the notified amount.
(9)
Where the notice has been replaced by one served on another sub-tenant,
subsection (1) does not apply if the sub-tenant has notice of that when making
the payment.
25
78
Withdrawal and replacement of notices
(1)
A notice under section 76 is replaced if the landlord serves another notice on
the same sub-tenant for a notified amount covering the same rent or part of that
rent.
(2)
A notice under section 76 served on one sub-tenant is also replaced if—
30
(a)
the landlord serves a notice on another sub-tenant for a notified amount
covering the same rent or part of that rent, and
(b)
in relation to any of the premises comprised in the first sub-tenant’s
sub-lease, the second sub-tenant is an inferior or superior sub-tenant.
(3)
The landlord must withdraw a notice under section 76 if any of these
35
happens—
(a)
the notice is replaced;
(b)
the notified amount is paid, unless it is paid wholly by the sub-tenant.
79
Recovery of sums due and overpayments
(1)
For the purposes of the recovery of sums payable by a sub-tenant under a
40
notice under section 76 (including recovery by CRAR), the sub-tenant is to be

Tribunals, Courts and Enforcement Bill [HL]
Part 3 — Enforcement by taking control of goods
Chapter 2 — Rent arrears recovery
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treated as the immediate tenant of the landlord, and the sums are to be treated
as rent accordingly.
(2)
But those sums (as opposed to rent due from the immediate tenant) are not
recoverable by notice under section 76 served on an inferior sub-tenant.
(3)
Any payment received by the landlord that the sub-tenant purports to make
5
under a notice under section 76, and that is not due under the notice for any
reason, is to be treated as a payment of rent by the immediate tenant, for the
purposes of the retention of the payment by the landlord and (if no rent is due)
for the purposes of any claim by the immediate tenant to recover the payment.
(4)
But subsection (3) does not affect any claim by the sub-tenant against the
10
immediate tenant.
Supplementary
80
Contracts for similar rights to be void
(1)
A provision of a contract is void to the extent that it would do any of these—
(a)
confer a right to seize or otherwise take control of goods to recover
15
amounts within subsection (2);
(b)
confer a right to sell goods to recover amounts within subsection (2);
(c)
modify the effect of section 67(1), except in accordance with subsection
(3).
(2)
The amounts are any amounts payable—
20
(a)
as rent;
(b)
under a lease (other than as rent);
(c)
under an agreement collateral to a lease;
(d)
under an instrument creating a rentcharge;
(e)
in respect of breach of a covenant or condition in a lease, in an
25
agreement collateral to a lease or in an instrument creating a
rentcharge;
(f)
under an indemnity in respect of a payment within paragraphs (a) to
(e).
(3)
A provision of a contract is not void under subsection (1)(c) to the extent that it
30
prevents or restricts the exercise of CRAR.
(4)
In this section—
“lease” also includes a licence to occupy land;
“rent” and “rentcharge” have the meaning given by section 205(1) of the
Law of Property Act 1925 (c. 20).
35
81
Amendments
Schedule 14 makes minor and consequential amendments (including repeals
of powers to distrain for rentcharges and other amounts within section 80(2)).
82
Interpretation of Chapter
In this Chapter—
40
“landlord” has the meaning given by section 68;

Tribunals, Courts and Enforcement Bill [HL]
Part 3 — Enforcement by taking control of goods
Chapter 3 — General
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“lease” has the meaning given by section 69 (subject to section 80(4));
“notice of enforcement” means notice under paragraph 7 of Schedule 12;
“rent” (except in sections 66 and 80) has the meaning given by section 71;
“tenant”, in relation to a lease, means the tenant for the time being under
the lease.
5
Chapter 3
General
83
Abolition of Crown preference
Crown preference for the purposes of execution against goods is abolished.
84
Application to the Crown
10
(1)
This Part binds the Crown.
(2)
But the procedure in Schedule 12 may not be used—
(a)
to recover debts due from the Crown,
(b)
to take control of or sell goods of the Crown (including goods owned
by the Crown jointly or in common with another person), or
15
(c)
to enter premises occupied by the Crown.
85
Regulations
(1)
In this Part—
“prescribed” means prescribed by regulations;
“regulations” means regulations made by the Lord Chancellor.
20
(2)
The following apply to regulations under this Part.
(3)
Any power to make regulations is exercisable by statutory instrument.
(4)
A statutory instrument containing regulations under paragraph 24(2) or 31(5)
of Schedule 12 may not be made unless a draft of the instrument has been laid
before, and approved by a resolution of, each House of Parliament.
25
(5)
In any other case a statutory instrument containing regulations is subject to
annulment in pursuance of a resolution of either House of Parliament.
(6)
Regulations may include any of these that the Lord Chancellor considers
necessary or expedient—
(a)
supplementary, incidental or consequential provision;
30
(b)
transitory, transitional or saving provision.
(7)
Regulations may make different provision for different cases.

Tribunals, Courts and Enforcement Bill [HL]
Part 4 — Enforcement of judgments and orders
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Part 4
Enforcement of judgments and orders
Attachment of earnings orders
86
Attachment of earnings orders: deductions at fixed rates
(1)
Schedule 15 makes amendments to the Attachment of Earnings Act 1971 (c. 32).
5
(2)
Those amendments are about the basis on which periodical deductions are to
be made under an attachment of earnings order.
(3)
In particular, they provide that deductions under certain orders are to be made
in accordance with a fixed deductions scheme made by the Lord Chancellor
(rather than in accordance with Part I of Schedule 3 to the 1971 Act).
10
87
Attachment of earnings orders: finding the debtor’s current employer
(1)
After section 15 of the Attachment of Earnings Act 1971 insert—
“15A
Finding the debtor’s current employer
(1)
If an attachment of earnings order lapses under section 9(4), the proper
authority may request the Commissioners—
15
(a)
to disclose whether it appears to the Commissioners that the
debtor has a current employer, and
(b)
if it appears to the Commissioners that the debtor has a current
employer, to disclose the name and address of that employer.
(2)
The proper authority may make a request under subsection (1) only for
20
the purpose of enabling the lapsed order to be directed to the debtor’s
current employer.
(3)
The proper authority may not make a request under subsection (1)
unless regulations under section 15B(5) and (8) are in force.
(4)
The proper authority may disclose such information (including
25
information identifying the debtor) as it considers necessary to assist
the Commissioners to comply with a request under subsection (1).
(5)
The Commissioners may disclose to the proper authority any
information (whether held by the Commissioners or on their behalf)
that the Commissioners consider is necessary to comply with a request
30
under subsection (1).
(6)
A disclosure under subsection (4) or (5) is not to be taken to breach any
restriction on the disclosure of information (however imposed).
(7)
Nothing in this section is to be taken to prejudice any power to request
or disclose information that exists apart from this section.
35
(8)
The reference in subsection (5) to information held on behalf of the
Commissioners includes a reference to any information which—
(a)
is held by a person who provides services to the
Commissioners, and