Distraint

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Distraint or distress is "the seizure of someone’s property in order to obtain payment of rent or other money owed", especially in common law countries.[1] Distraint is the act or process "whereby a person (the distrainor), traditionally even without prior court approval, seizes the personal property of another located upon the distrainor's land in satisfaction of a claim, as a pledge for performance of a duty, or in reparation of an injury."[2] Distraint typically involves the seizure of goods (chattels) belonging to the tenant by the landlord to sell the goods for the payment of the rent. In the past, distress was often carried out without court approval. Today, some kind of court action is usually required,[3] the main exception being certain tax authorities, such as HM Revenue and Customs in the United Kingdom and, in the United States, the Internal Revenue Service—agencies that retain the legal power to levy assets (by either seizure or distraint) without a court order.[4]

History[edit]

Article 61 of the Magna Carta extended the law of distraint to the monarch's properties. In England in 1267 the Statute of Marlborough was passed making distraint illegal without a court order.[citation needed]

Procedure[edit]

The goods are held for a given amount of time, and if the rent is not paid, they may be sold.[citation needed] The actual seizure of the goods may be carried out by the landlord, the landlord's agent, or an officer of the government, a bailiff or sheriff officer in the United Kingdom or a sheriff or marshal in the United States.

Certain goods are protected against distraint - these are called "privileged goods". Such goods include, for example, goods belonging to the state, fixtures, goods delivered to the tenant or debtor for business purposes, the goods of a guest, perishable goods (e.g. food), livestock, gas, water, electricity, and tools of the tenant's trade.

Forced entry is usually not permitted by the distraint officer, however in the UK, in the event of entry being refused to the HMRC distraint officer, HM Revenue and Customs can apply for a break open warrant under Section 61(2) of the Taxes Management Act, 1970. This would permit forced entry to the debtors premises by the HMRC distraint officer. Any additional costs incurred from obtaining the warrant are passed onto the debtor and added to the debt to be collected by distraint.

Also in the UK, forced entry is also permitted if the distress warrant is for amounts of a criminal nature; court fines for instance. The use of forced entry for these purposes are covered in the Domestic Violence, Crime and Victims Act 2004.[5]

Reform in the United Kingdom[edit]

In the United Kingdom, there have been proposals to reform the remedy of distraint. Concerns have been expressed that the use of the distraint remedy may result in violations of human rights, such as Article 8 of the European Convention on Human Rights, the right to respect for private life.[6] The Lord Chancellor's Department (now the Ministry of Justice) in May 2001 issued the consultation paper Enforcement Review Consultation Paper No. 5: Distress for Rent, which proposes abolishing distraint for residential leases, but retaining it for commercial property subject to certain safeguards to ensure compliance with the Human Rights Act 1998.

It was thought Distraint would be abolished in the UK when the Tribunals, Courts and Enforcement Act 2007, s.71 came into force, replacing the remedy, solely for leases on commercial property, by a statutory system of Commercial Rent Arrears Recovery (CRAR).[7][8] (The Tribunals, Courts and Enforcement Act 2007 received Royal Assent July 2007 but no date for implementation was published. The Tribunals, Courts and Enforcement Act 2007 (Commencement No 8) Order 2012 has been introduced. The order brings into force sections 93 and 94 of the Act (on 1 October 2012 and 17 May 2012 respectively), both of which amend the Charging Orders Act 1979.)

Distraint in the United States[edit]

Distraint was adopted into the United States common law from England, and it has recently been challenged as a possible violation of due process rights under the Fourteenth Amendment.[9] In decisions like Luria Bros. and Co. v. Allen, 672 F.2d 347 (3d Cir. 1982), however, the courts have upheld the rule because, as a landlord's self-help remedy, distraint involves no state action and thus cannot violate due process rights.[10] In the case of distraint by the federal government for collection of taxes, the power of administrative levy by distraint (distress) dates back to the year 1791, according to the U.S. Supreme Court.[11]

Distraint in Sweden[edit]

In Sweden, distraint is performed by the Swedish Enforcement Authority. Bank assets and similar are taken first, but if needed the Enforcement Authority can visit people's homes, assisted by the police. Goods needed for an acceptable standard of living are protected, like clothes, TV-sets and stoves. Expensive items can be replaced with cheaper, and excess items can be taken. Goods found in the home, but belonging to others, e.g. to the girlfriend, can also be taken unless it is proven who it belongs to.

See also[edit]

Notes[edit]

  1. ^ "Distraint", Compact Oxford English Dictionary
  2. ^ Steven H. Gifis, Barron's Law Dictionary, p. 139 (2d ed. 1984).
  3. ^ "Distress", Britannica CD 2000
  4. ^ See United States v. Rodgers, 461 U.S. 677, 103 S. Ct. 2132, 83-1 U.S. Tax Cas. (CCH) paragr. 9374 (1983) (dicta) and Brian v. Gugin, 853 F. Supp. 358, 94-1 U.S. Tax Cas. (CCH) paragr. 50,278 (D. Idaho 1994), aff’d, 95-1 U.S. Tax Cas. (CCH) paragr. 50,067 (9th Cir. 1995).
  5. ^ "Domestic Violence, Crime and Victims Act 2004". 
  6. ^ Fuller v Happy Shopper Markets Ltd [2001] All ER
  7. ^ Tribunals, Courts and Enforcement Act 2007, ss.72-87/ Sch.14
  8. ^ "Explanatory Notes to Tribunals, Courts And Enforcement Act 2007". Office of Public Service Information. 2007. Retrieved 2008-03-05. "paras.317-405" 
  9. ^ Korngold, G. Can Distraint Stand Up as a Landlord's Remedy? 5 Real Est. L.J. 242 (1977)
  10. ^ Casner, A.J. et al., Cases and Text on Property, Fifth Edition. Aspen Publishers, New York: NY, p. 526
  11. ^ Act of March 3, 1791, Ch. 15, § 23, 1 Stat. 199, 204, as cited in Phillips v. Commissioner, 283 U.S. 589, 595, n. 5 (1931), at [1], providing for "levy by distress and sale."