Encyclopedia
Distress
The landlord's old right to seize a tenant's goods for unpaid rent. In BC it's governed by the Rent Distress Act and the lease, and it has strict rules.
For example: A landlord whose tenant stops paying talks to a lawyer before choosing between distress and other remedies. (Illustration only, not a real deal.)
Official source: Rent Distress Act (BC Laws)
Example only, not a real client. Say an owner is behind on mortgage payments and must sell quickly. The property may sell below market value, but the buyer has less time for due diligence and fewer protections in the contract.
What I’d tell a friend
Distressed sales can offer value, but often with more risk and less time. Do your homework fast.
Why it matters to you
Distressed sales can be bargains, but the seller often can't fix problems or offer much information. Buyers take on more risk and should price it in.
How to use it in your deal
Landlords should get legal advice before using distress, because mistakes, like seizing exempt goods, seizing after ending the lease, or not following notice rules, can lead to damages. Generally, a landlord can't both terminate the lease and distrain for the same arrears, so choose the remedy carefully.
Goods owned by third parties, such as leased equipment, may be protected, and secured creditors registered in the Personal Property Registry may have priority. Tenants facing distress should get legal advice right away and talk to the landlord; paying arrears before the sale usually stops it. Equipment lessors should register their interests.
Buyers of businesses should check for arrears or distress actions. Lenders to tenants care about it too, since distress can take collateral. Keep rent records clear, since disputes over amounts are common, and send written demands before acting.
Mistakes I see
Landlords seizing improperly. Terminating and distraining together. Tenants ignoring notices.
In BC and Vancouver
The Commercial Tenancy Act and case law govern distress; decisions are on CanLII.
Official sources: Commercial Tenancy Act (BC Laws) · CanLII (court decisions) · Personal Property Security Act (BC Laws)
What it means
A distressed property is one being sold under financial pressure, such as by a lender or through a court process.
Sales may happen through a court-ordered process, with different rules.
What to know
Court-approved sales often come with few or no warranties.
Get advice from a BC lawyer on the process and risks, and line up financing and inspections early, since timelines can be tight.
I can help you track distressed listings and check comparables quickly.
Questions to ask before you sign
- What's owed?
- Has the lease been terminated?
- Who owns the goods?
- Has a bailiff been engaged?
Keep reading
Related terms: Commercial Tenancy Act, Accelerated rent
- Leasing out commercial space in BC: a landlord's guide
- Leasing commercial space in BC: a tenant's guide
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General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.