Note for Commercial Landlords: What to do when tenants stop paying rent

Note for Commercial Landlords: What to do when tenants stop paying rent

What do I do if my Commercial Tenants stop paying rent?

Where tenants of commercial property stop paying their rent, there are a number of potential remedies, depending on the circumstances, that landlords may want to consider pursuing including:

• drawing down from any rent deposit;
• pursuing any guarantor or former tenant;
• diverting rent from any sub-tenant;
• exercising Commercial Rent Arrears Recovery (CRAR);
• suing to recover rent arrears;
• forfeiting the lease.

Legal advice should be taken before deciding what course of action is appropriate but commercial landlords should be aware that their options for enforcing these remedies may be restricted where:

(a) in the case of a tenant who is an individual:

• the tenant has applied to Court for an Interim Order; or
• there is an Individual Voluntary Arrangement (IVA) in place; or
• a bankruptcy order has been made against the tenant;

(b) in the case of a corporate tenant:

• a Law of Property Act 1925 (LPA) receiver has been appointed; or
• an administrative receiver has been appointed; or
• a Company Voluntary Arrangement (CVA) has been approved; or
• a liquidator has been appointed.

Contact Our Commercial Property Solicitors

If these are issues which are affecting you, you can contact Yvonne Addy for advice by telephone on 0207 486 5131 or by email via yvonne.addy@mwh-law.co.uk or make an online enquiry here.

Please note this blog was prepared on 23 January 2020. It is not intended to be advice and should not be relied upon as such.