2. There could be legitimate circumstances that
explain the delayed payment by a tenant.
3. As a commercial landlord, you
depend on tenants making
timely rental payments. After
all, you need the money to pay
the bills that you have. When a tenant fails to
pay on time, it affects the landlord’s ability to
cover their financial obligations for that specific
property.
4. With the financial downturn affecting businesses
across North America, commercial landlords have
to be aware of what their options are to remedy
non-payment of rent. There are a number of steps
that commercial landlords would be wise to follow.
Commercial landlords would be well advised to
contact the tenant to see why they are late on the
rent.
5. There could be a legitimate circumstance that
explains the delayed payment. A death in the
tenant’s family could also be having an impact
on the ability of the business
to operate. The possibility of
a workplace accident cannot
be ignored. A workplace
accident could result in a
shutdown and loss of
business-related
income for the
tenant.
6. By contacting the tenant,
the landlord has an
opportunity to make
arrangements with the
tenant to correct the
payment problem. Following this method avoids
costly legal entanglements and allows both
parties to reach an equitable solution to the
problem. The other benefit is that the landlord
also avoids the cost involved with advertising,
interviewing and approving a new tenant.
7. Distrain is a term that means
seizing the tenant’s property
to recover rental arrears.
Seizing a tenant’s chattels is
a complex process for a
landlord to undertake. This
process needs to be carefully
undertaken in order to make
sure that the tenant’s right to
use and enjoy the premises is
not breached by the process.
8. The landlord is required to
provide the tenant with
notice, informing the tenant
of the intention to dispose of
chattels to cover the rental
arrears that are owed. The
process usually requires two
independent appraisals of the
chattels after a pre-specified
period of time. The sale of chattels may, or may
not, cover all expenses and rental arrears.
9. If the sale does not cover the arrears, the
landlord must sue the tenant to recover the
remaining rental arrears. If the tenant informs a
commercial landlord that he or she can no
longer afford to lease the space, the landlord
must decide whether to accept the fundamental
breach or refuse it. Either way, the landlord will
potentially have to go through the process of
suing the tenant to recover any of the lost rental
income.
10. Commercial landlords need to carefully weigh
their options when attempting to recover lost
rental income. The best solution is often to find
a way to work with the existing tenant to resolve
any arrears before legal action is taken. In the
event a landlord’s best option is to pursue legal
recovery of rental arrears, then they will have to
weigh their legal options.
