In the unfortunate circumstances where a tenant falls into rent arrears, landlords may commence court proceedings to recover the sums owed.

If successful, the court will grant judgment in favour of the landlord.

The judgment itself, however, is merely confirmation that a debt is owed to the landlord by the tenant.

As a result, if the tenant does not willingly pay the judgment debt, then the landlord may have to use methods of enforcement to recover the judgment debt.

There are many different options of enforcement.

This could involve instructing Court Enforcement Officers, who would apply for a Writ of Control, in which the court gives the Officers power to enforce the judgment and recover the sums using any appropriate method.

Other enforcement options may be more appropriate depending on the circumstances of the case.

We also see situations where landlords work with tenants to agree a repayment plan in respect of the judgment debt.

This can be a positive solution which works for all parties involved. However, landlords need to be aware that there are also risks in doing so, which can result in difficulties recovering the judgment debt in part or entirely.

In the same way that a claim has a limitation period (i.e. the time within which you are required to commence court proceedings before you are time barred), judgments also have an expiry date.

The general position is that if you don’t take enforcement action within six years, then you lose the right to do so. 

If you wish to enforce a judgment which is more than six years old, then you would require the court’s express permission before it would be willing to grant any Enforcement Officers a Writ of Control.

This is not an easy application as the court’s default position is that the attempt to enforce is time barred unless you can provide a very good reason as to why the court should exercise its discretion to allow you the opportunity to enforce out of time.

This application usually requires witness evidence explaining the reason for the delay.

Whilst, the delay may be due to an extended repayment plan agreed in good faith between the parties, it is entirely possible that this would not be an acceptable justification. This delay could remove the possibility of instructing Court Enforcement Officers or pursuing any of the other enforcement options.

Helpfully, however, there is no limitation period for enforcing a judgment through the insolvency route.

This means that even if a judgment is more than six years old, a landlord could still present a bankruptcy or winding up petition to the court in respect of an unpaid judgment debt. This will, of course, likely result in the landlord incurring further legal costs in doing so.

However, there are still criteria which must be met to enforce a judgment debt through the insolvency route.

An important one is the value of the outstanding judgment debt. If the judgment debt falls beneath £5,000 for individuals and £750 for companies, then the insolvency route will no longer be an option. 

This is a particularly important consideration if a landlord is entering into an agreement for a repayment plan.

If the repayment plan exceeds six years from the date of the judgment and at that point less than £5,000 (or £750 for companies) of the debt is outstanding, then if the tenant stops paying it is probable that the landlord will have run out of enforcement options and will face real difficulties in recovering the sums owed.

Any creditor should be mindful of this, especially if they are dealing with savvy debtors who are aware of this limitation. 

If a landlord is looking to reach an agreement to accept payment of a judgment debt in instalments, then it would preserve the landlord’s options to ensure that the repayment plan is for a period of less than six years (from the date of the court’s judgment) and/or to formalise the agreement through a settlement deed.

A settlement deed would provide a further method of recovery through a separate breach of contract claim (if the tenant defaults on payments under the settlement deed).

If you have a judgment debt and are considering reaching an agreement to accept payment by instalments, please speak to a solicitor who can explain the potential risks and consider the options for protecting your right to recover those monies.

Lauren Windsor is a Solicitor at Taylor Walton Solicitors www.taylorwalton.co.uk