There are a number of options open to you where a commercial tenant doesn’t pay their rent on a property. Here we look at the approaches you can take to recover the debt or evict the tenant.
Short or long term problem?
Consider the likelihood of this happening again if this is the first time a tenant has missed a rent payment. Where it’s an isolated occurrence, speak to your tenant and try to make a plan for them to cover the missed payment.
You can take further action if it looks like they have long term financial problems.
Commercial Rent Arrears Recovery (CRAR)
Where a commercial tenant doesn’t pay their rent, but you want them to stay in the property, you can use enforcement agents to recover the arrears. This is only viable if their business is still trading
If the tenant doesn’t comply with the Notice of Enforcement, or doesn’t pay when the bailiffs attend at the property, goods can be seized and sold to pay the arrears. This can often be enough of a prompt for immediate payment to be made.
Forfeiture of lease
You have the option to forfeit the lease when your commercial tenant doesn’t pay their rent. This is beneficial if you perceive the situation this will continue in the future, .
This process can be started where a tenant is at least 21 days in arrears. There is no need to go to court to carry this out.
Enforcement agents can peacefully gain entry to the property and change the locks – preventing the tenant from gaining access and forfeiting the lease.
Do I need a possession order to evict commercial tenants?
The majority of commercial landlords forfeit a lease through the above Common Law route. However, there are cases where you will require a possession order from the courts to terminate the lease.
This will provide your tenant with a period to file their defence or to apply for relief for forfeiture. They can then pay off the arrears and any associated costs.
When you are granted a possession order, the tenant will be given 28 days to apply for relief or leave the property. At this point you will have possession back.