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Taking Control of Goods and Enforcement Agent Regulation Updates during Coronavirus Period

Source: Sent from Ministry of Justice to the Certificated Enforcement Agents Association

Amendments to the taking control of Goods and Certification of Enforcement Agents regulations during the Coronvavirus period

I am writing to let you know about secondary legislation that the Government has laid today to address the impact of coronavirus on matters relating to enforcement using the taking control of goods process. These measures will come into force tomorrow and will remain in effect for the duration of the coronavirus restrictions, as set out below.

As you will be aware, the current pandemic is an unprecedented challenge for the United Kingdom. The Government has taken action to combat the spread of coronavirus, including introducing measures to safeguard public health and measures to support the continued operation of the justice system.

The Taking Control of Goods and Certification of Enforcement Agents (Amendment) (Coronavirus) Regulations 2020 have been laid today and amend the Taking Control of Goods Regulations 2013 (TCG 2013) and the Certification of Enforcement Agents Regulations 2014 (CEA 2014). The amending regulations will:

  1. Prevent enforcement at residential premises and on highways while, due to the coronavirus pandemic, restrictions that prevent a person from leaving the place in which they live without a reasonable excuse are in place (“the restrictions” – see explanation below) (amendments to Regulations 10 and 23 of TCG 2013);

  2. Automatically extend, by 12 months, the period for taking control of goods in cases where this period is within one month of expiry, while the restrictions are in place (amendment to Regulation 9 of TCG 2013);

  3. Increase the minimum amount of net unpaid rent that must be outstanding before commercial rent arrears recovery (CRAR) may take place to an amount equivalent to 90 days’ rent, while protections from forfeiture for business tenancies are in place under the Coronavirus Act 2020 (amendment to Regulation 52 of TCG 2013); and

  4. Automatically extend, for a period of six months, enforcement agent certificates in cases where these are within three months of expiry, while the restrictions are in place (amendment to Regulation 7 of CEA 2014).

These measures are time-limited and their effect is limited as set out above. For the three measures whose effect is related to “the restrictions”, this is defined in relation to the duration of the coronavirus ‘emergency period’ (as defined in regulation 6(1) of the Health Protection (Coronavirus, Restrictions) (England) Regulations 2020 or regulation 8(1) of the Health Protection (Coronavirus Restrictions) (Wales) Regulations 2020).

It is the Government’s view that enforcement at residential premises and on highways during the coronavirus period presents a public health risk, as it is very difficult for enforcement agents to comply with social distancing requirements while doing so. While the Government understands that the majority of enforcement agents and firms have already ceased enforcement visits in response to public health guidance and is grateful for the support shown by the enforcement trade associations in this matter, we are concerned that there are still some who are undertaking enforcement activity inappropriately. The Government is therefore legislating to ensure a uniform approach is taken across the sector. I am keen to emphasise that these measures are aimed at providing important safeguards for public health, and that the Government also expects enforcement agents and creditors to continue to play close attention to the social distancing requirements in all circumstances and to take a flexible and sympathetic approach to enforcement and to pursuing payments once the amendment regulations cease to be in force.

The Government acknowledges that the exceptional circumstances engendered by coronavirus are presenting substantial challenges to the normal business of enforcement agents, enforcement firms, and creditors. The legislation will automatically extend time limits for taking control of goods and enforcement agent certificates: these measures are intended to recognise the impact of coronavirus on the taking control of goods procedure, reduce uncertainty and ease the burden on administrative and judicial resource in the courts at this time.

At a time when many businesses are experiencing financial challenges, the Government has already taken action to protect tenants under commercial leases through the three-month moratorium on commercial forfeitures introduced under section 82 of the Coronavirus Act 2020. It is clear that many landlords are working closely with tenants to find an approach that works for both parties, and we are grateful to see this taking place. However, the Government has been disappointed to learn that some landlords are continuing to seek to recover rent through aggressive mechanisms, including CRAR. This risks causing significant and unnecessary disruption to otherwise viable companies at this time. The Government is therefore increasing the minimum amount of rent that must be due before CRAR may be used, to provide businesses with additional protection and flexibility in managing their finances. This is in line with measures already taken by the Government to protect business tenancies from forfeiture and to encourage creditors to show forbearance to businesses affected by coronavirus.

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