Q&A - My tenants have disappeared, taking the keys and owing rent - what should I do?

09/05/2011

Q.  I own a commercial property. My tenant told me he had some financial difficulties but hoped to pay owed rent the following month. Three months on he has paid nothing and has left the property. He is saying he owes me nothing, and is also refusing to hand back the keys. What should I do?

A.  If you fear your tenants' business has failed or may fail, or if rent has been missed for the first time, you should serve notice upon the tenant in respect of their arrears under the terms of the Lease. Make it clear that you intend to go to Court to recover the arrears and repossess the property. Most Leases provide that the Tenant will have to pay the costs of enforcement action as well as the costs of reinstating the property where it has fallen into disrepair.

If the rent is still not paid, you will need to apply to the Court for repossession and recovery of outstanding arrears, together with any costs of reinstating the premises. Under the terms of the Lease, you should also be entitled to recover interest on the arrears. Once an Order of the Court is made, you can change the locks and re-enter the property. You may then also seek to recover the rental arrears by enforcement of the Court Order by means of the bailiff service, bankruptcy or similar.

The important thing to bear in mind is that a well drafted Lease will cover most eventualities. It is important that a formal lease is put in place before a tenant takes possession and that advice is sought as to the options open to you should your tenants fail to comply with any of their obligations under the Lease. The process will be clearer and more straightforward where there is a comprehensive Lease in place.

Iain Hall

Iain Hall

Senior Solicitor

Part of our Property team in Wrexham

Hannah Fynn

Hannah Fynn

Solicitor

Part of our Commercial and Residential Property team in Oswestry