Landlords are increasingly being asked to sign
"waiver" documents that they have received from a
tenant's hire purchase lessor.
This is because goods leased under a hire purchase agreement are
not exempt from distress. If a tenant defaults on rent
payments due under its lease, the landlord is entitled to distrain
against goods at the property, including any hire purchase goods,
in order to discharge the arrears. A hire purchase lessor
must then serve a declaration on the landlord in order to recover
the hire purchase goods.
Many hire purchase lessors are seeking to shortcut this procedure
by asking landlords to sign a "waiver" making the hire
purchase goods exempt from distress.
Whilst there is no obligation on a landlord to agree the
"waiver" that has been proposed, it may be sensible to
agree it in principle, in order to reduce the time and costs
involved if hire purchase goods might be distrained.
The terms of any "waiver" document need to be reviewed
carefully, as hire purchase lessors sometimes seek to impose
obligations that are outside the landlord's control or simply
impractical – for example an obligation on the landlord
to notify the hire purchase lessor if the landlord sells his
interest in the leased premises. A schedule of the hire
purchase goods should be appended and kept up-to-date and then
placed with the deeds.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 13/03/2012.
