We have seen a marked increase in requests by commercial landlord clients, and administrators of companies with commercial property assets, to obtain section 88 warrants as part of a strategy to recover tenant arrears.
A s88 warrant can be applied for as soon as the assignation of a commercial lease has occurred. The benefit of having a s88 warrant to hand is that a landlord has the option to act without delay in the recovery of arrears.
Swift action can result in successful recovery, whereas waiting for the grant of a court remedy can reduce recovery prospects.
Where a commercial landlord holds an extract of a lease registered with the Registers of Scotland, it does not have to raise court proceedings to recover its arrears. That saves time and cost.
What are s88 warrants?
The warrant gets its name from section 88 of the Debtors (Scotland) Act 1987. If you are not the named landlord under a lease, then you need a s88 warrant to seek to recover rental and other arrears from tenants where the lease allows for “registration for preservation and execution”.
These works permit summary diligence – the collective name given to the suite of remedies available to a landlord – to occur: the enforcement of payment obligations against tenants without first having to go to court, and thus saving significant time and costs
The court application requires proof of ownership of the leased subjects and an extracted registered lease. It generally takes around two weeks from first instruction to receipt of the s88 warrant (allow a further week if not in possession of an Extracted Lease).
Once in hand, a landlord can effect diligence which includes the service of a Charge for Payment, the service and registration of an Inhibition, the Arrestment of funds (equivalent to the English Freezing Order) and the Attachment of goods and stock.
How much do s88 warrants cost?
We offer a fixed fee of £395 + VAT + £36 (Extracted Lease) and £20 (s88 Court Fee) per warrant application, and will discount our fee where multiple warrants are required.
It is hoped that where landlord and tenant relationships are under stress that parties follow the key principles of the UK Government’s Code of Practice for commercial property relationships and find an acceptable resolution.
Each relationship is different, however. When recovery of arrears is sought, a s88 warrant can assist a landlord in that objective.