There is no denying that commercial businesses and landlords are under a lot of financial pressure right now, and it’s a pressure that doesn’t seem to be easing any time soon. With more and more businesses struggling to stay afloat, business administration is becoming a reality for many. As a landlord, it’s important to know what this means for you, and what happens when your commercial tenant files for administration. Knowing what your rights are is key, especially if you find yourself needing to collect a debt. This blog has looked at how commercial landlords can collect a debt after administration.
What is Business Administration?
When a business goes into administration, it means that the business is being taken under the management of an administrator. This usually happens if the business is in debt and it’s unable to pay the money owed. It’s another way of saying that the business has become insolvent, so it is put under the control of a licensed insolvency practitioner. Once a business has gone into administration, it is protected from creditors, making it difficult for people to claim outstanding debts.
What Does it Mean for the Commercial Landlord?
As a landlord, one of your commercial tenants going into administration can be hugely stressful. Not only does it mean that you will likely have outstanding rent to pay, but you also have to deal with the insolvency practitioner. Fortunately, commercial landlords are entitled to rent during any period of occupation by an administrator, even if the business is struggling. Of course, this doesn’t mean that the rent will be paid on time or in full. You might even be asked by the administrator to reduce or waive the rent to help the business continue to trade, or they might try to arrange a deal or payment plan.
How Can I Recover Outstanding Debts?
As a landlord, you are classed as an unsecured creditor. This means that you will be among the last in line to receive any money from a commercial tenant who has gone into administration. Plus, there is no guarantee that you will receive the owed money in full. This can be hugely stressful, as you are bound to have costs to cover and property maintenance bills to pay. You can improve your chances of getting what you’re owed by engaging a commercial debt recovery company. This is where we come in and Cobra Financial is always happy to help.
At Cobra Financial, we have the tools and techniques needed to help commercial landlords recover debt. When a commercial tenant goes into business administration, a lot is immediately up in the air, but our expert team can guide you through the process of claiming the money that’s rightfully yours. Contact us today to find out more.