Collection of Commercial Rent Arrears

Dealing With Collection of Commercial Rent Arrears

Over recent years, it has become increasingly more common for businesses to move into a rented property instead of buying a location outright.

This has shown to be particularly common among Small to Medium Enterprises (SME’s) that may not be able to accurately predict their revenue and cash flow.

As cost-effective and straightforward renting may be for businesses, unfortunately, there are times when organisations may fail to pay their rent on time or at all.

When financial difficulties arise and rent goes unpaid, the money that is owed is classed as “Commercial Rent Arrears”.

Commercial Rent Arrears are primarily classed as “Priority Debts”, which can cause especially serious problems if they are left unpaid.

If they are not paid, this could result in serious repercussions such as eviction or being taken to court.

The main two options of Commercial Rent Arrears recovery consist of terminating the lease or attempting to collect the arrears.

This can be a stressful situation for any landlord in England and Wales who are experiencing businesses that have accumulated a number of Unpaid Commercial Rent Arrears.. However, there are a plethora of options that can be used to recover these arrears.

In this article, our team of expert Commercial Debt Collectors have put together the best options for recovering Commercial Rent Arrears.

The Three Ways To Collect Commercial Rent Arrears

Landlords that are Dealing With Collection of Commercial Rent Arrears will need to treat every case on its own merit.

The circumstances of Commercial Rent Arrears and their leases tend to differ greatly, but the main options landlords can choose to deal with the problem are:

Forfeiture, Commercial Rent Arrears Recovery (CRAR) and Pursuing A Guarantor.

Forfeiture

Forfeiture, or “re-entry”, is the landlord’s right to terminate the lease if the tenant is in breach of any of its covenants.

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