Commercial rent arrears recovery (CRAR) and forfeiture are two methods of dealing with tenants who are not paying their rent when it is due.
Forfeiture is the process of cancelling a commercial lease. Normally written into the contract between the landlords and the tenants, the lease can be forfeited if the rent has not been paid after a specific length of time, usually between 14 and 21 days. After this, forfeiture can be carried out, without any notice to the tenant (in fact, it is better if the tenant is not aware of what is about to happen). Once the time period has passed, an Enforcement Officer will be instructed to go in and change the locks, thereby cancelling the lease, and stopping the tenant from returning to the property.
Should the tenant break back in, they are committing a criminal offence. However, as with CRAR, you cannot carry out forfeiture if the premises are in any part residential, and let to the tenant. The exception to this is if the residential part and the commercial part of the property are under separate leases, then of course, you can still recover the commercial part.
You will have to obtain a Court Order to evict from the residential part of the property, but here at Able, we can even help you with that.
Forfeiture after CRAR
You cannot run CRAR & Forfeiture side by side, it has to be one or the other. If however, you decide that you wish to use CRAR to recover Commercial Rent and on attending the location you find that there is nothing to recover, it is best if the Enforcement Officers withdraw and cancel the CRAR instructions. Once this has happened, there is no legal waiting time before forfeiture can be undertaken. However, best practice is to wait 2-3 weeks before forfeiting the Lease.
How can we help?
Able Investigations has experience with both CRAR and forfeiture. With forfeiture, we can either enter the property and change the locks straight away or explain the situation to the tenants and the fact that they will not be able to use the premises to make a living anymore. To help you recover the money you are owed, we can also use a controlled goods agreement to start a payment plan if the tenants are unable to pay the amount owed in full. This can be an extremely powerful incentive for them to pay you the rent you are owed.