As the opportunity to run a business from home increases a new risk of recovering business debts in the form of unpaid invoices and judgments is emerging for Judgment Creditors.
It is from our enforcement division that we can see these sorts of risks when taking bailiff action enforce against a business from home.
Our insight provides a cautionary tale for business owners, credit teams, and Create Sales teams, and our wider community of MCOL users and litigation teams. Whilst we all want to grow our businesses, the trend towards working from home means we are trading with customers we have never met, and who look more substantial than they really are. This means we are also entering county court judgments (CCJs) against customers who we don’t know perhaps as well as we could.
Rights of access to private property
As you might expect there is a plethora of information on how to avoid bailiff action when based out of a home – and the UK Government provides this advice on its information pages – see
https://www.gov.uk/your-rights-bailiffs.
There is no doubt that post the COVID-19 pandemic of 2020, more and more businesses will be set up and run from a home address. This is turn means businesses who might have been visited by an enforcement agent in their office, shop or warehouse, are now based out of their home. Of course, not all businesses can run from a home office, and some will need to have a business unit, retail space, or office elsewhere. But as the nature of enforcement using a Warrant or Writ is to take control of goods, the goods have to be located and when they are located in a business address it is easier to get hold of them.
Building an enforcement strategy to locate goods in the easiest access point has always been part of our added value planning process. It is something we do here at Shergroup and we work with judgment creditors to find out where the goods could be located. Sometimes the planning is simple – a vehicle outside a residential address which belongs to the business and is sign painted as such. In other cases, such as an art gallery, which has ceased trading, then address of the owner of the business is one of a number of addresses which has to be visited to check the location of paintings and sculptures.
The opportunity to take legal control of goods inside the property changes with this shift in working from home. Unlike an office, warehouse, or shop, an enforcement agent cannot force entry to a private house. So in using a Warrant of Control or a Writ of Control to compel payment, it is down to the skill of the enforcement agent to gain entry in accordance with the Taking Control of Goods Regulations 2013.
This in turn can impact on the opportunity of the to take goods into legal control which in turn gives the creditor the leverage needed to negotiate either a payment in full, or a satisfactory payment plan supported by a signed Controlled Goods Agreement.
How can Shergroup help?
So, a few things you can do to put yourself in a better position when faced with enforcing a judgment against a business:
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When a new customer comes on the books take steps to check the name of the customer, and the address – we can help on this if you need to dig deeper!
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Make use of the inexpensive search facilities of Registry Trust to see if the customer has a CCJ registered against them
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Check out the address on Google – you’d be surprised what you can find out about the address before you even start to do business – do you like what you see?
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Think about if you are dealing with a substantial business or something much smaller
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Make it a term of your new sales agreement or contract that the director or directors signs a personal guarantee as part of your contract. In this way if you can’t get to company assets then the director’s own assets will be available for enforcement.
Again, if you do rely on a personal guarantee from a director(s) – check out where the guarantor lives – and find out if they own their own house (so you can secure a CCJ on the property using a Charging Order if the need arises)