The basic question asked by any landlord considering debt recovery is: "What can I do?". For landlords whose majority of properties are in England, the Scottish options may seem quite different. Ultimately, however, tenants are the same north and south of the border and their assets (or lack of them) are not governed by where they live but their business and trading history. The answer to the question "What can I do?" is normally answered by looking at the tenant rather than the legal system.
Until recently the first port of call in England was "levying distress"; a set of procedures which pursued assets held by the tenant at the property and, if the debt was not paid, sold them to raise funds against the arrears. I was always envious that England had such a wonderfully named debt recovery tool. It seems only appropriate that if the tenant causes distress to the landlord by not paying on time them the landlord is entitled to levy some distress back at them through debt recovery. Sadly distress is no longer the official term and, since April 2014, England has a codified set of procedures (covering the old rules on distress and more) collectively known as CRAR ("Commercial Rent Arrears Recovery") found in Part III of the Tribunal, Courts and Enforcement Act 2007.
In Scotland we have our own catch all term; "diligence". Normally translated as "debt recovery procedures", diligence refers to all steps from an initial Charge for Payment (final judicial demand with 14 days notice) or arrestment of bank accounts, through to bankruptcy and insolvency proceedings.
On the face of it, "distress" or CRAR procedures are more immediate than diligence as some CRAR steps can be undertaken in England without first holding a court judgment. Many Scottish leases can, however, be registered and the landlord proceed straight to diligence through a form of recovery called "summary diligence", pursuing at least the rent arrears without first having to raise a court action. The range of debt recovery options available in Scotland under summary diligence (include attacking goods, attacking money in the Bank, arresting money held by the debtor in their till or safe, through to insolvency) are much wider than those under CRAR. If a landlord has had more experience with debt recovery in England, they may feel distressed about the lack of "distress" in Scotland but a Scottish solicitor can diligently explain how "diligence" is often much better.
None of this answers the question "What should I do?". The best advice on debt recovery comes from detailed information on the tenant. If your tenant has not paid on time, and you want to proceed to debt recovery, then list a few thoughts about the tenant, their trading and their assets and pass these to us. What do they do? Are they still trading? Are there other units being traded by this tenant elsewhere? What is within the unit (and are there assets that might have a value)? Do you have a director's guarantee? Have there been problems with payment before and what debt recovery approaches worked then?
There are a wide range of options for diligence and a landlord can undertake a number of them simultaneously or shortly after each other. Accordingly, the more we as solicitors know about the tenant and their assets, the more efficiently and effectively we can recover your debts. That way, even if you do not have a happy Martinmas, you will hopefully be able to celebrate when the tenant does pay up in full shortly after. No need to be distressed…