As businesses struggle to trade in the current economic climate, commercial landlords are finding their own living at risk as tenants delay or miss payments. Liz Shaw, partner in the Property Litigation team at Wake Smith solicitors, explains what landlords can do to protect themselves in these difficult times.
In the last quarter of 2008 4,607 companies went under in the UK - a 52% increase in liquidations on last quarter of 2007*. Figures in 2009 are unlikely to look much better.
Alarm bells should start ringing if a tenant changes his behaviour, missing payments, being late or asking for a change in frequency. Landlords need to take a proactive approach should any of these circumstances happen, and decide whether to keep the tenant or move towards a more hostile approach to obtain rent through court action.
If it is unlikely that the property will be let again quickly a temporary arrangement to pay a reduced rent or monthly instalments may be the best approach to keep the income stream and property occupied, as well as support the landlord-tenant relationship for longer-term benefit. It is important to work together to obtain a suitable solution.
If left too late, the landlord's freedom to forfeit, sue, distrain or even use money held in a rent deposit may be severely curtailed if the tenant is or is likely to shortly become insolvent. It is crucial that advice should be sought at an early stage so as to put the landlord in the best possible position in the circumstances of each case.
*According to Government figures, reported 6th February 2009
For further advice please contact Liz Shaw on 0114 266 6660 or email [email protected].
