News Articles

Landlord's Right of Distress

Under any commercial or residential lease, one of the most difficult and typical problems faced by a landlord is a tenant's failure to pay rent that is owed under the lease, and what to do in such a circumstance.  One of the possible remedies available to the landlord is the right of distress. 

The right of distress is the right of the landlord to seize the property of a tenant located on the leased premises to secure the landlord's claim for rent that is overdue under the lease.  A right of distress is a common law right, however it has been amended and codified in the Civil Enforcement Act of Alberta. 

In exercising the right of distress, the landlord must ensure that a number of requirements, as follows, are met:

1. The amount that the landlord claims the tenant owes is actually owed to the landlord by the tenant;
2. The amount owed by the tenant to the landlord is defined in the lease as rent;
3. The property that the landlord is going to seize belongs to the tenant or a person who is liable for rent;
4. The property that the landlord is going to seize is located on the leased premises;
5. The property that the landlord is going to seize is not exempt from seizure under the Civil Enforcement Act and Regulations.

Some examples of the types of property owned by a tenant that may be exempt from seizure include food, clothing up to a value of $4,000.00, household furnishings and appliances up to a value of $4,000.00, medical and dental aids of the tenant, and property used by the tenant to earn income from their occupation up to a value of $10,000.00.

If the 5 above requirements are met and the landlord decides that they want to seize the property of the tenant, the seizure must be executed by a licensed Bailiff. When seizing the property, the Bailiff will serve the tenant with documents giving the tenant notice that the property was being seized for the rent that is overdue.  From the date the tenant is served with these documents, the tenant has 15 days to provide the Bailiff with a Notice of Objection stating the tenant's reasons for objecting to the seizure.  If the tenant does not do so within the 15 days, the Bailiff is entitled to take steps to sell the seized property.  However, prior to the sale of the property, the Bailiff would have to provide the tenant and the landlord with a notice, outlining the date, and the method of the sale of the property, at least 15 days before the date of the sale of the property,

Finally, with respect to any right of distress, the landlord must keep in mind that carrying out a landlord distress is a recognition that the landlord is willing to continue on with the lease.  Therefore, a landlord cannot terminate and retake possession of the leased premises for the same rent that is overdue for which the landlord has distressed.  If a landlord does, they will be liable for damages for a wrongful distress, trespass and conversion of the tenant's property.  These damages would then be deducted from any rent that is still owing to the landlord.

This is just a brief summary of a landlord's right of distress, and the procedure involved.  Any decision by a landlord to seize the property of a tenant for rental arrears should involve consultation with a lawyer.

 By Glyn Walters
October 17, 2001