Defaulting Tenants - Beware!

In tough economic times, commercial tenants often fall into rent arrears. Landlords faced with this situation have several options.

Send a Letter of Claim
To the tenant and any guarantor detailed in the lease demanding payment of the rent arrears, within 7 days, plus interest, failing which legal proceedings will be issued to recover the debt, further interest and costs.

Issue a debt claim at Court
If the tenant/guarantor fails to pay within the timeframe.

Insolvency proceedings
Alternatively, if the arrears are over £750 a landlord may serve a statutory demand on the tenant/guarantor followed by bankruptcy or winding up proceedings depending upon the identity of the tenant/guarantor.

Distress
Instruct a bailiff to seize goods from the property to be sold at auction to pay the arrears.

Forfeiture
Forfeit the lease to terminate it, providing there is a forfeiture provision in the lease, by either instructing a bailiff to physically re-enter the property or using the Court procedure which is more time consuming and costly.

Conclusion
Landlords should obtain legal advice on the most appropriate action to take as it will depend upon the circumstances of each case.

Amy Dolan
Brabners Chaffe Street