Though the majority of commercial tenants are a joy to rent to, there are some that cause problems. A lot of this is due to late or missed rent payments. Below, we have detailed how to deal with delinquent tenants as a commercial landlord.
Identifying Difficult Tenants
It’s unlikely to come as a complete surprise when you have a delinquent commercial tenant, as there are usually warning signs along the way. To get an idea of whether a commercial tenant is going to become a problem, keep an eye out for signs of delinquency, such as sporadic rent payments and a lack of communication.
You need to understand the legal framework surrounding commercial tenants, and what your rights are as a landlord should someone fall into rent arrears. Take a look at your tenant lease agreements, and fully understand what their rights and obligations are. This will help you to pursue any owed money and eviction, as it shows what the tenant agreed to.
Communication and Negotiation
When you are dealing with delinquent commercial tenants, it’s important to communicate and negotiate. This means being open and honest about the situation, and trying to come to an agreement on a payment plan. For some commercial tenants, a payment plan can help them to catch up with missed payments. If you are unable to communicate and negotiate, you could consider mediation and conflict resolution. This is when a third party helps you to reach an agreement that works for both parties.
Taking Legal Action
If communication and negotiation doesn’t work, you can take legal action against delinquent commercial tenants. This involves sending notices and demand letters, to show the tenants that you are taking things seriously. Sometimes, this is enough to encourage someone to pay. If, after sending notices and demand letters, you are still struggling with delinquent commercial tenants, you can begin the eviction process.
You could also take them to small claims court, where a judge will decide if they need to pay, how much they need to pay and a potential payment plan. It’s important to remember that there’s no guarantee of winning at a small claims court, nor is there any guarantee that your debtor will pay, which is why debt collection agencies are often the preferred route.
Working with a Debt Collection Agency
If you have ever had to deal with delinquent commercial tenants before, you will know that doing so can be stressful, time consuming and overwhelming. This is why a lot of commercial landlords seek the help of a debt collection agency, such as Cobra Financial. When you work with a debt collection agency, you benefit from professional assistance at every stage of the debt collection process.
Of course, it’s important to choose the right agency. At Cobra Financial, we have a wide range of tools and techniques at our disposal, equipping us with everything we need to successfully recover your debts. We tailor our approach to you and your debtor, working tirelessly to track down debtors and organise repayment. Get in touch with our talented team to find out more.