Unpaid Rent Arrears

Unpaid rent can be frustrating and particularly economically damaging for a landlord. Therefore, it's crucial that you have a strong understanding of your rights under your lease and the options available to you. There are several avenues of redress that can be explored to recover unpaid rent. The method you wish to take depends on whether you wish to maintain relations, or remove unscrupulous tenants.

It's often unbeknown to landlords as to why tenants are falling into rent arrears. Therefore it may be advantageous to attempt to resolve rent arrears amicably, and with open dialogue, to understand a tenants position and to preserve business relationships moving forwards. You can do this by simple correspondence and informal negotiation. However, this may prove to be unsuccessful, especially where a tenant is unable, unwilling or avoiding payments to the detriment of a landlord.

Unpaid rent is damaging in both a commercial and residential setting. Initially, there will be a short term loss of income. However, should this persist there may be serious financial loss to the landlord. It can result in even further hardship where landlords are subsequently required to finance the property themselves.

Dealing with Unpaid Rent

It's important that you are fully aware of your obligations and rights under the lease, and afterward your options to address unpaid rent. This may include:

• rights to pursue former tenants under Authorised Guarantee Agreements
• rights to pursue personal guarantors and rights of forfeiture

It's therefore important to fully understand your lease to ensure you comply with the formalities required to make use of your rights.

A further option would be to bring a debt action. This must be done within 6 years of the sum falling due but will result in Court action in an attempt to obtain a judgment, which can then be enforced should payment not be forthcoming. Enforcement options, include charging orders over property, attachment of earnings, warrant of control and third party debt orders.

Other forms of redress include:

• recovery under the Commercial rent arrears recovery procedure (CRAR)
• collections from a sub-tenant
• bankruptcy and winding up petitions

All of these options have differing effects and will depend upon the circumstances of the matter.

Contact Us

If you own a commercial or residential property and are currently impacted by tenants failing to pay rent, we can help.

At Aticus Law, we have an established Commercial team that can offer you advice and assistance on the terms of your lease, your options to recover arrears and to deal with unscrupulous tenants.