As a commercial landlord, your premises are a source of income and this comes from the rent paid by the tenant. In the majority of cases, this will be paid every month without issue. But situations can arise where the tenant stops paying the rent. Therefore, prior to them moving into the property, it is important to future proof your commercial lease with the terms of the lease agreement.
The lease agreement
The lease or tenancy agreement is a crucial legal document that outlines the terms of the tenancy. Normally, they last for a fixed period of time, often anywhere from five to twenty-five years though shorter-term versions for six or twelve months also work for some types of property. The lease agreement lays out the amount of rent paid in addition to the length of tenancy and also covers matters such as the configuration of the physical space and if the tenant can sublet the property in any way. It may include stipulations such as paying rent monthly or quarterly for the sake of notice.
The other vital part of the lease agreement outlines the boundaries and responsibilities for both parties. This can cover areas such liability for repairs and alterations, who is responsible for service and maintenance charges and how and when bills will be paid. There should also be a provision in the lease to break down what happens if the tenant stops paying the rent. The document must be in writing and must be legally binding, so often a solicitor is involved in creating the document.
If the tenant stops paying rent
With a correct and binding lease in place, then the landlord is a strong position to handle any non-payment of rent. There are still processes that need to be followed to ensure that the law is complied with. Examples of possible options include:
The landlord may agree on a payment plan to allow the tenant to clear the outstanding debt and still remain within the property. This agreement should be created by someone with the appropriate legal background to ensure it is binding.
Commercial Rent Arrears Recovery (CRAR)
This system was introduced in 2014 and allows landlords to use enforcement officers to take control of the tenant’s goods. These goods are then sold to make money that is paid against the arrears. There are notices that must be served before this is done so using a certificated enforcement officer is crucial.
Able Investigations are certificated enforcement officers with years of experience in dealing with recovering commercial rent owed. For help with Commercial Rent Arrears Recovery call us on 0845 370 7401 or fill out our contact form.