During the coronavirus lockdown, many commercial landlords have questions regarding what they can and cannot do if their tenants do not pay their monthly or quarterly rents. To support landlords during these unprecedented times, we have put together a quick question and answer page on what help is available.
Can we still take action for non-payment of commercial rent?
Yes. The Commercial Rent Arrears Recovery (CRAR) process is still available to landlords during the coronavirus pandemic, but only if they are owed at least 90 days if rent. If the tenant is refusing to keep up rental payments and you’re not in the position to be able to offer them any concessions, this is an option that can be used.
Even where the company is unable to trade during the lockdown regulations or it has suffered a downturn in business, it can provide commercial landlords with some security during these turbulent times. By starting the CRAR process and first serving the tenants with a notice of enforcement, through a certificated enforcement agent, they are able to take control of the goods for you. This gives you some level of guarantee that the debt will be paid or you have goods to the value of the arrears.
Are we able to conduct forfeiture of leases on commercial properties?
No, we cannot currently forfeit leases for the non-payment of commercial rent. As part of the coronavirus regulations, the government has put a moratorium on forfeitures until at least 30th June 2020. If tenants fall behind with their monthly or quarterly rental payments during this three month period landlords are unable to take back possession of the property.
Is it worth taking enforcement action against commercial tenants?
Many commercial landlords might not think there is a point to starting the rent arrears process whilst businesses are not fully operational. Even if you send out a Notice of Enforcement, this doesn’t mean that you have to take further action as soon as it’s expired. You then have 12 months in which to take control of goods at the property if you wish.
However, by issuing a Notice of Enforcement to the tenants it shows that you are taking control of the situation and looking to secure payment. You can then take the approach that you feel is right for both your and your tenants’ circumstances. This might be payment in full straight away, a payment plan or securing goods to the value of the arrears.
Help for commercial landlords during coronavirus lockdown
If you are a commercial landlord struggling to collect arrears on one or more of your properties then contact The Bailiff Company today. We can support small landlords with single properties through to large property management companies with multiple sites.
Many businesses across the country will be facing financial difficulties during this time, but not all of them will have such severe problems that they will be unable to pay their rent. This is why it’s important to understand the differences between those that cannot pay and those that are choosing not to pay. Before taking action against your tenant, our team will gain a brief overview of their current situation to take an individual approach to each case.
Our commercial property team are still all working through the COVID-19 crisis, either remotely or in the office with social distancing measures in place. All your calls and emails will be answered, so don’t delay and start collecting on your commercial rent arrears.
Contact The Bailiff Company on 0113 418 2817 or email office@bailiffcompany.co.uk.
More information
Coronavirus – Options available to commercial landlords
Collecting utility and service charges with commercial rent arrears