Commercial Rent Arrears

This is where commercial tenants have failed to pay the commercial landlord rent under the terms of the lease resulting in arrears.

Commercial rent arrears can be problematic for landlords. Where a landlord finds that they have a tenant who is refusing to pay rent, the landlord may consider the following courses of action to recover the rent arrears (these are subject to the latest COVID-19 regulations).

1. A Debt Claim – where a landlord issues proceedings in the county court to recover the rent arrears.

2. Forfeiture – one of the most draconian steps open to a commercial landlord is to “re-enter” the property and change the locks resulting in the termination of the lease. This is known as forfeiture. Care should be taken before taking such steps which often require the correct processes to be followed.

3. Pursuing guarantors or the original tenants – if there is an Authorised Guarantee Agreement, it may be possible to pursue the guarantor or original tenant for the rent arrears.

4. Commercial Rent Arrears Recovery (CRAR) – CRAR allows commercial landlords to instruct enforcement agents to take control of goods belonging to their tenant in order to sell them to recover a value equivalent to the rent arrears.

There may be justifiable reasons why commercial tenants find themselves in rent arrears. Possible options available to you could include:

1. Entering negotiations with the landlord.
2. Defending a debt claim.
3. Making an application for relief from forfeiture.

Whether you are a commercial landlord or tenant, our specialist team can assist you in the following way:

1. We will work with you to understand your business.

2. Assess the issues including the particulars surrounding the rent arrears.

3. If applicable, we can assist in partaking in a negotiation / alternative dispute resolution exercise with the other side.

4. We will advise you on the merits of your case and suitable strategy going forward.

5. Work efficiently and robustly when dealing with any court applications, hearings or enforcement action.

6. Where guarantors or any parties cannot be traced, we can assist in tracing them for you.