Distraint
Encyclopedia
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. 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." 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, 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.
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.
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.
.
Distraint will be abolished in the UK when the Tribunals, Courts and Enforcement Act 2007
, s.71 comes into force, replacing the remedy, solely for lease
s on commercial property
, by a statutory system of Commercial Rent Arrears Recovery (CRAR).
. 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. 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.
Renting
Renting is an agreement where a payment is made for the temporary use of a good, service or property owned by another. A gross lease is when the tenant pays a flat rental amount and the landlord pays for all property charges regularly incurred by the ownership from landowners...
or other money owed", especially in common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
countries. 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." 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, 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
Internal Revenue Service
The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...
-- agencies that retain the legal power to levy assets (by either seizure or distraint) without a court order.
History
Article 61 of the Magna CartaMagna Carta
Magna Carta is an English charter, originally issued in the year 1215 and reissued later in the 13th century in modified versions, which included the most direct challenges to the monarch's authority to date. The charter first passed into law in 1225...
extended the law of distraint to the monarch's properties. In England in 1267 the Statute of Marlborough
Statute of Marlborough
The Statute of Marlborough was a set of laws passed by King Henry III of England in 1267. There were twenty-nine chapters, of which four are still in force...
was passed making distraint illegal without a court order.
Procedure
The goods are held for a given amount of time, and if the rent is not paid, they may be sold. The actual seizure of the goods may be carried out by the landlord, the landlord's agent, or an officer of the government, a bailiffBailiff
A bailiff is a governor or custodian ; a legal officer to whom some degree of authority, care or jurisdiction is committed...
or sheriff officer
Sheriff officer
A sheriff officer is an officer of the Scottish Sheriff Court, responsible for serving documents and enforcing court orders. The jurisdiction of a sheriff officer is limited to the area of their commission , unlike messengers-at-arms...
in the United Kingdom or a sheriff
Sheriff
A sheriff is in principle a legal official with responsibility for a county. In practice, the specific combination of legal, political, and ceremonial duties of a sheriff varies greatly from country to country....
or marshal
Marshal
Marshal , is a word used in several official titles of various branches of society. The word is an ancient loan word from Old French, cf...
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.
Reform in the United Kingdom
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. 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 1998Human Rights Act 1998
The Human Rights Act 1998 is an Act of Parliament of the United Kingdom which received Royal Assent on 9 November 1998, and mostly came into force on 2 October 2000. Its aim is to "give further effect" in UK law to the rights contained in the European Convention on Human Rights...
.
Distraint will be abolished in the UK when the Tribunals, Courts and Enforcement Act 2007
Tribunals, Courts and Enforcement Act 2007
The Tribunals, Courts and Enforcement Act 2007 is an Act of the Parliament of the United Kingdom. It provides for several diverse matters relating to the law, some of them being significant changes to the structure of the courts and fundamental legal procedures...
, s.71 comes into force, replacing the remedy, solely for lease
Lease
A lease is a contractual arrangement calling for the lessee to pay the lessor for use of an asset. A rental agreement is a lease in which the asset is tangible property...
s on commercial property
Commercial property
The term commercial property refers to buildings or land intended to generate a profit, either from capital gain or rental income.-Definition:...
, by a statutory system of Commercial Rent Arrears Recovery (CRAR).
Distraint in the United States
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 AmendmentFourteenth Amendment to the United States Constitution
The Fourteenth Amendment to the United States Constitution was adopted on July 9, 1868, as one of the Reconstruction Amendments.Its Citizenship Clause provides a broad definition of citizenship that overruled the Dred Scott v...
. 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. 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.
See also
- Collection agencyCollection agencyA collection agency is a business that pursues payments of debts owed by individuals or businesses. Most collection agencies operate as agents of creditors and collect debts for a fee or percentage of the total amount owed....
- Quia EmptoresQuia EmptoresQuia Emptores of 1290 was a statute passed by Edward I of England that prevented tenants from alienating their lands to others by subinfeudation, instead requiring all tenants wishing to alienate their land to do so by substitution...
- Self-help (law)Self-help (law)Self-help, in the sense of a legal doctrine, refers to individuals' implementation of their rights without resorting to legal writ or consultation of higher authority, as where a financial institution repossesses a car on which they hold both the title and a defaulted note...
- Tax leviesTax leviesA Tax levy, under United States Federal law, is an administrative action by the Internal Revenue Service under statutory authority, without going to court, to seize property to satisfy a tax liability. The levy "includes the power of distraint and seizure by any means". The general rule is that no...
- Warrant saleWarrant saleA warrant sale was a statutory means of collecting debts in Scotland until 2001. Legal procedure for warrant sales was governed by the Debtors Act 1987...
- Sequestration (law)Sequestration (law)Sequestration is the act of removing, separating, or seizing anything from the possession of its owner under process of law for the benefit of creditors or the state.-Etymology:...
- Attachment (law)Attachment (law)Attachment is a legal process by which a court of law, at the request of a creditor, designates specific property owned by the debtor to be transferred to the creditor, or sold for the benefit of the creditor. A wide variety of legal mechanisms are employed by debtors to prevent the attachment of...