Legal Definitions - del credere bailiff

A del credere bailiff refers to an agent, such as a bailiff, who undertakes an additional financial guarantee for their principal (the person or entity they represent). In exchange for extra compensation, such as a higher commission, this agent promises to cover any losses if a third party, like a buyer or a debtor, fails to make a payment or becomes insolvent. Essentially, a del credere bailiff assumes the risk of non-payment, ensuring their principal receives the expected funds regardless of the third party's financial reliability.

• Example 1: Property Management and Rent Collection

  Imagine a landlord who owns several rental properties hires a bailiff service to manage their portfolio, which includes collecting rent from tenants. The bailiff service, in this scenario, agrees to operate on a del credere basis for rent collection. This means they charge a higher management fee, but in return, they guarantee the landlord will receive the full rent amount each month, even if a tenant defaults or is late with payment. The bailiff service would then be responsible for pursuing the defaulting tenant, but the landlord's income stream is protected.

  This illustrates a del credere bailiff because the bailiff service (acting as the agent) takes on the financial risk of tenant non-payment, guaranteeing the principal (the landlord) a consistent income, in exchange for increased compensation.

• Example 2: Court-Appointed Asset Liquidation

  A court appoints a bailiff to seize and sell a debtor's assets, such as vehicles or specialized equipment, to satisfy a judgment owed to a creditor. The bailiff, perhaps due to specialized expertise or a desire to secure the contract, offers to act on a del credere basis. They guarantee the creditor a minimum recovery amount from the sale of the assets, even if the auction yields less than expected or if a buyer at the auction defaults on their payment. The bailiff would absorb any shortfall up to the guaranteed amount from their own funds.

  Here, the bailiff acts as a del credere agent by guaranteeing a specific financial outcome (minimum recovery) to the principal (the creditor), taking on the risk that the asset sales might not generate enough or that buyers might fail to pay.

• Example 3: Commercial Debt Recovery

  A small business is struggling to recover a large outstanding commercial debt from a difficult client. They hire a specialized bailiff firm to handle the collection. The bailiff firm, confident in their recovery methods, offers a del credere arrangement. They agree to pay the business a guaranteed percentage of the outstanding debt within a specified timeframe, regardless of whether they successfully collect the full amount from the debtor. Their fee would be higher to account for this financial risk. If the debtor pays less than the guaranteed amount, the bailiff firm makes up the difference to the business.

  This demonstrates a del credere bailiff because the bailiff firm guarantees a specific financial recovery to the principal (the business), assuming the risk of the debtor's non-payment or partial payment in exchange for a higher fee.