It happens. A tenant could miss the monthly payments for the lease. Sometimes, you have to wait for a few more days after the deadline to receive it. The reasons are aplenty. The economy isn’t doing well, or the business changed leadership. The cash flow is tight, or it can no longer afford the rent anymore. What if the tenant doesn’t pay for months? As a landlord, what are your options to recover what is due to you?
1. Consider Commercial Rent Arrears Recovery (CRAR)
Back in the old days, landlords could be brutal in their approach to lease collection. For example, they could change the locks of the office and then seize all the goods inside. They then had the prerogative to sell them to recoup their losses. The term for this process was distress.
It became the norm for many years until 2014 when the UK introduced commercial rent arrears recovery (CRAR). The regulations are more transparent, but the limitations are also stricter. These include the non-seizure of the business assets, which only a certified enforcement agent or a bailiff can do.
Under this process, the landlord can enforce collections on delayed or missed rent for commercial tenancies only. They can do so as early as seven days after the tenants failed to pay. The landlord can also claim the arrears from the sub-tenants.
CRAR has a prescription period, and with many rules to follow, it can be confusing. Landlords can then consider commercial rent recovery services. They don’t have to worry about the fees. They will become part of the tenant’s due.
2. Talk to the Guarantor
It will be easier if the tenant has a guarantor, who can pay on behalf of the tenant. It reduces the collection process and saves you a lot of headaches. Note, though, that you may not reach out to the guarantor immediately. The first person you should talk to is the tenant. For a paper trail, request collection in writing. After two weeks of non-payment, you can then send another demand letter to the tenant, as well as inform the guarantor of the situation. You may repeat this procedure within 21 days of non-collection.
3. Pursue Section 8
Section 8 Notice is also Notice to Quit. It means that you believe the tenant breached the lease contract and that you want to possess the property again. It also implies you’re bringing the other party to court to recover the rent.
It is a lengthy and particular process. It needs to follow a specific format to be valid. The form, for example, may have to include the name of the tenant, property address, and grounds for possession. It will also indicate the expiry date of the notice. The tenant doesn’t need to leave the property until they receive the note, and even then, you may still have to apply for a possession order if they don’t vacate.
The process of getting what is yours may be time-consuming, but it’s always worth pursuing. After all, it’s also a matter of justice and fairness.