If a commercial tenant has failed to pay their rent, it is only natural that you would wish to seek to evict them, however finding the best method to suit your needs is paramount. We will show you the best way to evict commercial tenant.
Forfeiting the lease
The majority of commercial leases give landlords the right to re-enter their property, to change locks and to terminate the tenant’s lease should any of the lease’s covenants be breached. This includes failure to pay rent. This is called “forfeiture”. Some landlords are keen to go straight to this step because of their tenant’s ongoing rent arrears. However, it is vital to ensure as a landlord that you have a right to forfeiture and, if so, that the appropriate legal procedure is followed.
A lease can be forfeited in one of two ways. The landlord can either re-enter the property and change the locks or, alternatively, obtain an order from the court to evict the tenant. There are, however, some problems with this way of evicting a commercial tenant. For example, the tenant may ask the court for relief from forfeiture which could slow the process of regaining the property. Also, recovering the debts accrued by the tenant may not be possible when resorting to the forfeiture method.
The CRAR Method
Another option is to utilise the CRAR (Commercial Rent Arrears Recovery process). This allows landlords to recover rent with no need to take the matter to court since only the services of a certificated enforcement agent is required.
The CRAR procedures applies to the rent, interest and VAT which is due under the terms of a written commercial lease. As long as the net unpaid rent is equivalent to 7 days of rent, the CRAR procedure can be brought into use as long as 7 working days’ notice has been given to the tenant.
Enforcement agents can use this procedure can recover the overdue rent as well as any interest and VAT. No insurance premiums, rates or service charges are able to be recovered through this method. Should the rent remain unpaid, the enforcement agent is permitted to enter the property and seize goods from the tenant to cover the outstanding debt.
The benefit of this procedure is that it is quicker and easier to utilise than forfeiture. It also ensures that the landlord will be able to recoup their outstanding debts.
Using enforcement Agents to utilise The CRAR Procedure
To evict a commercial tenant is sometimes difficult, however If you are a commercial landlord with a non-paying tenant, the CRAR procedure is often the best, fastest and most affordable course of action. Able Investigations can use this procedure to recover your outstanding rent, ensuring that each step is correctly followed in line with the law, and that your overdue rent will be recovered in a timely manner. Should you also require assistance to evict your commercial tenants, we can also assist you with this.