2022 Best Lawyers | Best Law Firms | U.S. News & World Report | Franchise Law Tier 1 National

National Leading Franchise Law and Commercial Litigation Business Law Firm

Powerhouse Trial Lawyers and Dominant Problem-Solvers in Complex Business Disputes and Transactions

What options do commercial landlords have when renters default?

On Behalf of | Sep 2, 2022 | Firm News |

Paying rent per the terms of the lease agreement is one of the major obligations of a commercial tenant. In fact, most lease contracts come with provisions regarding what the landlord can do when the commercial tenant defaults in paying rent. 

If you own commercial property, you’d probably appreciate that dealing with a tenant who is not paying their rent on time can be very frustrating. Knowing what to do (and mistakes to avoid) is key to effectively dealing with a tenant who won’t pay their rent on time.

Here are three actions you can take when a commercial tenant defaults on their rent obligation:

Withhold security deposit

If the tenant paid a security deposit at the onset of the lease agreement, then you may utilize this deposit to cover the outstanding rent arrears. However, the decision to withhold the security deposit depends on the terms of the lease and local laws.

Sue the tenant for the unpaid rent

You can seek the court’s intervention to help recover the rent arrears in question. This is especially necessary when the tenant disputes what they owe in arrears. If the court establishes that the tenant is in arrears, they will be directed to pay the amount they owe. 

End the tenancy in forfeiture

Where the tenant’s business has collapsed and they have no means of paying the owed rent, you may consider writing off the arrears on your taxes as you terminate the tenancy contract. 

As a commercial landlord, you have a number of remedies at your disposal when dealing with a tenant who can’t pay their rent. Find out how you can safeguard your rights and interests while exploring your options. 

Share This