Many businesses cannot afford to put down the capital to buy a building outright. For this reason, commercial leases are often far better options. Tenants can gain long-term security for their company and the commercial landlord receives a regular stream of income.
Arrangements like this generally need to be backed up by a commercial lease agreement. This will state the specific terms of the lease, such as the amount of rent and when it is to be paid.
Unfortunately, both parties don’t always stick to their side of the bargain, and a tenant may withhold rent. What are your options if this happens to you?
Come to an agreement
After approaching your tenant for a reasonable conversation, you’ve discovered they have some cash flow problems that are only going to be temporary. If you trust the tenant and want to maintain a long-term business relationship, you may be able to come up with an alternative arrangement. They could pay the arrears in rent in smaller installments until they are back on track.
The security deposit
Most rental agreements come with a security deposit. This is a sum of money (usually one month’s rent) that is intended to cover damage and rent arrears. As long as you go through the appropriate channels, you might be able to make deductions based on the outstanding amount of rent that is due.
Terminating the lease
Ideally, you want to reach an amicable solution but this isn’t always possible. If it seems like there is no realistic way to get your rent payments, you may have to consider terminating the lease. Again, this should be possible, as long as the appropriate channels are followed.
As a commercial landlord, you have rights. If you’re caught up in a dispute with a tenant, seeking some legal guidance will give you a better idea of what your options are.