Commercial Rent Areas Recovery Introduction â€˘ In the current uncertain economic climate, it is hardly surprising that landlords of commercial premises increasingly find themselves faced with defaulting tenants.
Faced with a tenant in arrears, a landlord has a number of options it can pursue to recover the money. In broad terms, a landlord may:
Exercise the right of distress against the tenant’s goods, Issue court proceedings for the amount outstanding, Forfeit the lease.
A landlord can issue a debt claim for unpaid sums due under the lease. Such a claim will usually be pursued in the county court. A debt claim can be pursued whilst the lease is continuing, but may also be claimed: ď‚§ As part of proceedings to forfeit the lease; ď‚§ Or after the lease is forfeit.
A landlord needs to think carefully before issuing a claim. A tenant that is defaulting on payments under its lease is likely to have cash shortages and may have few (if any) valuable assets against which any judgment obtained can eventually be enforced.
A landlord should make enquiries as to any assets that its tenant owns when debt proceedings are contemplated.
Distress for rent is an ancient common law remedy which allows landlords to recover arrears of rent by seizing goods and selling them to cover the arrears, without giving notice or obtaining permission from the court.
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