Commercial rent arrears


Why would someone need this service?

In the current climate, previously stable commercial enterprises can unfortunately fall into financial difficulty. Tenants of commercial premises may not be in a position to pay the rent. It is important that a landlord in such a position has the ability to take swift and effective action to address the situation before arrears accumulate or the tenant goes out of business.

How does the process work?

It is the written lease agreement which determines the sum and date by when the rent must be paid. If a tenant has not paid by the agreed date, then after a period of usually between 14 to 21 days, a landlord will normally be entitled to take steps to enforce payment.

There are various options open to a landlord. He may seek to avoid commencing court proceedings and instead simply terminate (or forfeit) the lease. If this remedy is available, the lease would come to an end at the time that the forfeiture occurred and the tenant’s obligations would also end at this time.

Alternatively, the landlord may not want to terminate the lease but would instead wish to obtain a court judgment for the rent arrears. This judgment could in itself be enforced in a variety of ways.

How long does it take?

If the landlord wants to forfeit the lease it may be possible to take such action within a matter of days.

If the landlord would instead prefer to issue court proceedings in order to obtain a judgment, this could usually be obtained within two to four weeks after proceedings are served on the tenant (provided the proceedings are not defended).

Is it expensive? What are the likely costs?

The costs will depend upon the course of action selected by the landlord to enforce the arrears of rent owing. We will provide you with an estimate of costs when you first consult with us.

What should people consider before calling?

It would be helpful if you had available a copy of the lease together with a schedule of the rent arrears which are outstanding.

Commercial rent arrears tips

When making the decision about whether to forfeit the lease or not, it is a good idea to give some thought to the current state of the commercial letting market. You may wish to discuss this issue with a commercial letting agent. For instance, you may wish to consider whether if the lease is forfeited the property could be re-let on at least as advantageous terms as the current lease.

Commercial rent arrears myth busting

What myths surround this area?

It is sometimes thought that bailiffs can do the same job as a solicitor when evicting a tenant and do it much cheaper. In our experience, this option is not usually advisable. A solicitor should be instructed to consider the wording of the lease. There are some instances where it is not possible to forfeit the lease by instructing bailiffs. When the wrong option is used, the landlord may face a claim by the tenant for damages.

Meet the Commercial rent arrears team