Bank arrestments aren't your only option – why not try a third-party arrestment?

If your tenant is in arrears and you know of a person or business who owes that tenant money or goods, we can serve an arrestment on that person or business to capture the money or goods for your benefit. This process is like a bank arrestment (see our blog on bank arrestments here) but there are some differences that are worth noting. Here are ten things you need to know about a third-party arrestment:

1. You need either a document (such as a lease or minute of agreement) registered in the Books of Council of Session or a Decree following a court judgement. 
2. There is no requirement to serve a charge for payment prior to serving an arrestment. The exception to this is if the creditor is a public creditor, such as a local authority or Her Majesty's Revenue and Customs, and they have pursued the debt through a special abbreviated court process known as summary warrant, a charge must still be served.
3. The arrestment prevents the third party from paying money it owes to your tenant. The third party becomes obliged to pay you the money, up to the value of the debt.
   
4. Goods that are due to the debtor can also be arrested. The goods must be in the possession of the third-party to be arrested.
5. For the arrestment to be effective, the third party must have an obligation to make payment or transfer the goods to the tenant.
6. There is no protected minimum balance when goods are arrested.
7. Key is establishing when arrestee has the obligation to make the payment or transfer the goods.
8. If the arrestment is successful, the third party has a legal obligation to let us know within three weeks of the arrestment being served. There is no obligation to let us know if the arrestment is unsuccessful.
9. Where funds are arrested, they are automatically released by the third party to the landlord 14 weeks after the date the arrestment is carried out. Whereas, when goods are arrested, an action of forthcoming must be raised at the relevant Sheriff Court for the court to make an order allowing you to take possession of the goods.
10. The debtor can also choose to give written authority (called a 'mandate') for the arrestee to give arrested funds or goods to the creditor sooner.