April 7, 2020
The vast majority of the terms of your relationship with your tenant are set out in the lease or tenancy agreement (assuming it has been properly documented).
Usually, the lease of tenancy agreement will permit the landlord to take various steps:-
Forfeiture of the lease is where there are arrears of rent, or the tenant is insolvent, the landlord may be entitled to forfeit the tenancy and take possession of the property. This would allow the landlord to re-let the property.
There are, however, complications with this:-
Commercial Rent Arrears Recovery, or CRAR is the the process which replaces the old remedy of distraint. Distraint allowed a landlord to recover arrears of rent by seizing and selling the chattels of the tenant that were on/in the property.
The CRAR process is quite technical and deserving of an article itself. This article will follow shortly from the Commercial Property Team of Thomson & Bancks. If you require any information or have any questions in the meantime, however, please do get in touch.
It is important to remember that the forfeiture and CRAR procedures are normally considered to be mutually exclusive. Adopting the forfeiture procedure is an indication by the landlord that it considers the Tenancy Agreement to be at an end. Adoption of the CRAR procedure, however, is normally considered an indication by the landlord of an intention that the lease should continue. IE the landlord is seeking to recover the ongoing rental liabilities. Adoption of the CRAR procedure, therefore, normally acts as a waiver of the right to forfeit the lease.
Acting on a Guarantor or Rent Deposit assumes that your tenant provided a guarantor or rent deposit. If the original tenant assigned the lease to the present tenant then it may be possible to pursue the original or previous tenant under an Authorised Guarantee Agreement. Alternatively, a company tenant may have offered a personal guarantee by one of the directors or shareholders. On the other hand, if your tenant has provided a rent deposit then you should consider making a deduction from the sum held. Careful consideration of the rent deposit deed (or other document) should be carried out first.
The above options are not exhaustive and should only be exercised after careful consideration of the surrounding facts and legal issues.
James is a Solicitor, specialising in commercial and agricultural property law, undertaking a wide range of work, including sales and purchases of commercial and agricultural properties as well as Landlord and Tenant Act 1954, Agricultural Holdings Act and farm business tenancies. James has experience of negotiating complex land transaction documents including option and promotion agreements, easements, and overage / uplift deeds.
If you would like more information on this topic, please contact our team today using the form below.
If you have any questions or concerns, feel free to contact us for a free, no obligation enquiry.
The Coronavirus (COVID-19) outbreak is presenting us with an almost unprecedented situation. The spectre ...
If your residential property is served by a septic tank, you need to be aware ...
Significant changes to the Agricultural Holdings Act 1986 (AHA86) farm business tenancy regime may be ...