Commercial Property in Uncertain Times

The Tenant’s Dilemma – should I stay or should I go?

You may find yourself in these uncertain times with the June quarter rent due but more outgoings than income. If you are in arrears of rent then the best way of trying to prevent a problem arising with your Landlord is to contact them and try to reach an agreement which you are both happy with. A lot of Landlords are becoming more flexible when it comes to rental payments and may even agree to monthly payments.

According to the RICS survey published in April 2010 the commercial property market is picking up in some areas of the UK. However, it is still the case that although there have been some improvements the advantage is still with the Tenant when, for example, it comes to negotiating the renewal of a commercial lease.

If you find yourself in arrears of rent then you are in a difficult position if your Landlord decides to forfeit the Lease as you will be liable for the Landlord’s legal costs in most cases and you should, therefore, carefully check the Terms of your Lease to ascertain the implications of letting rent arrears escalate.

Your Landlord can recover possession of your premises and obtain a County Court Judgment against you in respect of the rent arrears.

It you require advice concerning the implications of getting into rent arrears then we can review your Lease and let you know the extent of your obligations under the Lease. This will assist you in considering your options. You may be able to negotiate with your Landlord or even reach an agreement to surrender the Lease.

The Landlord’s Dilemma – What options do I have

If you are a Landlord of commercial premises you will have to carefully consider your options if your Tenant is in rent arrears.

Most well drafted Leases provide that the Landlord can forfeit the Lease if the Tenant falls into arrears. It would usually allow you to recover the property, recover your legal costs and obtain a County Court Judgment against the Tenant for the outstanding rent arrears.

However, before taking this action you may wish to consider whether you will be able to re-let the premises in the current property climate.

If the Lease is forfeit your Tenant’s liability for the rent comes to an end and you may be left with empty premises. It would then be up to you to make sure that the property is secure.

Alternatively, you can simply do nothing and let the rent arrears escalate but there will reach a point where the rent arrears are at such a level that some action needs to be taken.

If you are the Landlord of commercial premises please contact us and we will review the Lease and advise you as to your options. We can also act for you to obtain possession of the premise and recover the rent arrears from your Tenant.

Contact Mary for assistance on 01344 383233
[read more about Mary]

Ccontact a member of the dispute resolution team on 0845 300 3574 and we will be happy to give you advice and guidance.

You can also contact us via our online contact form and we will respond quickly.

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