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Commercial rent arrears

When a tenant falls into commercial rent arrears, there are a number of remedies available to the landlord. However, some of these can have devastating consequences for the tenant and their ability to continue to trade.

While action can help persuade the tenant to settle the arrears, if pursued the wrong way, it can irreparably damage the relationship between the parties. Landlords who unlawfully exercise rights to seize and sell goods or to re-enter and resume possession, for example, can give rise to subsequent claims for breach of covenant, trespass and damages.

It’s vital therefore, that any proceedings against commercial tenants are handled correctly.

What options are available?

  • Forfeiture, which means lawful early termination of the lease by the landlord, allowing them to resume possession and secure a new tenant
  • Seizure of goods belonging to a tenant at the premises, either to compel the tenant to pay arrears or in order to sell them to pay the rent arrears
  • Re-directing payment of rents from a sub-tenant, which involves serving a formal notice on a sub-tenant requiring the payment of rent directly to the ‘superior ‘landlord until the arrears of the ‘intermediate’ landlord are satisfied
  • Negotiation, thereby securing terms of payment, particularly where it suits the parties to maintain their commercial relationship
  • Court proceedings to secure judgment in favour of the landlord, enforceable after a lease has been brought to an end.

Why choose Linder Myers?

At Linder Myers, our  Commercial Litigation team acts for landlords and tenants across the country, offering full and professional, expert advice and support to help guide both parties through this potentially hazardous area of commercial law.

For commercial landlords, we provide clear advice on the range of legal remedies available. Importantly we also spend time exploring the potential commercial impact of these remedies, including:

  • Consideration of the underlying market conditions and potential ease in securing a new tenant at the same or improved rent
  • The short term impact on the landlord due to any loss of rental income
  • The potential costs of restoring a property to a condition suitable for re-marketing
  • The landlords potential liability for general property costs while the property remains empty including, insurance, tax and rates.

For tenants, we explore, where possible, all available commercial solutions that will either allow the relationship to continue or extricate the tenant from the relationship on the most favourable terms available.

With extensive experience in dealing with commercial landlord and tenant disputes, if you need specialised legal support, contact Linder Myers today.

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