Whilst leasing a commercial property, you may occasionally encounter problems with tenants who cannot pay on time or otherwise violate the terms of contract. Generally, such cases lead to the eviction of the tenant with the help of a bailiff, but most property owners will exhaust all of their options first before the forfeiture of a commercial lease.
Here are some things that you should consider before considering forfeiture:
Assess the Market Situation
Always assess the market situation first – is the tenant’s business struggling to make ends meet? Is this his first time missing rent? Did he violate provision in the contract but find that it can easily be remedied?
If the answer to these questions is yes, consider giving your tenant a second chance. Perhaps the issue can be resolved before requesting the help of a bailiff.
Consider Partial Payment Options
There are times when a tenant has difficulties paying their rent in full. Consider allowing them to pay in parts over a set period, especially if this is their first offence. Sometimes, a partial payment is preferable to evicting your tenant outright.
Consider the Difficulties of Finding a New Tenant
One of the reasons why commercial property owners seek to maintain their existing tenants is the risk of taking on a new one. Finding a good tenant can be a challenge, especially during a market slump, which is why it is important to vet new applicants.
The vetting process can be quite extensive, as you will need to check references, outstanding credit and in some cases, hire an agency. It is a time consuming process, and each month that your rental property remains unoccupied will cost you.
Of course, if an amicable settlement fails, you may have no choice but to evict your tenant. Sometimes, a forfeiture of the lease contract for a commercial property is the best available option. There are professional services available with the experience and expertise to help you.