Unpaid commercial rents

Termination of the lease for unpaid rent

Breaking a commercial lease in the event of unpaid rent

Sometimes, the tenant of a commercial lease stops paying the rent.

How should the landlord react to this situation, which can be extremely detrimental to him financially?

What is the law on which he can rely to terminate his lease with this indelicate tenant?

Automatic termination after one month’s delay?

The commercial lease sets a deadline by which payment must be made each month. But what happens in the event of non-payment? This is specified in the termination clause. Generally speaking, it stipulates that the contract is terminated after one month’s delay. As you can see, this provision seems to be to the landlord’s clear advantage, providing effective protection in the event of unpaid rent.

But it remains theoretical, and there’s a big leap from theory to practice. In reality, the courts do not terminate commercial leases after a single month’s delay.

What we’re interested in here is practice. So what can a landlord do in practice, when faced with a problem of this type, which tends to drag on and on?

Order to pay

The first unpaid bills must be dealt with quickly. The landlord should instruct a lawyer to issue the tenant with a summons to pay, in accordance with the termination clause of the commercial lease. Here you’ll find details of this document, which is the only one with any legal value in your attempts to recover what is owed to you from your tenant. Any other approach, such as a letter you might send to convince your tenant, has no legal value. We naturally advise against intimidating letters and other pressure tactics that could backfire.

Applying to the summary proceedings judge for termination of the contract

If this first step is unsuccessful, the following month you must move on to the second stage: apply to the interim relief judge for termination of the commercial lease.

You should entrust this task to a lawyer specializing in commercial law. Do not hesitate to contact us for this type of assignment.

At the end of this procedure, you will obtain termination of the commercial lease and an order that the tenant pay the arrears. The interlocutory injunction (the “judgement”) enables the decision to be enforced, i.e. seizures, etc., to be carried out.

The problem will then be resolved.

Note: the judge may also grant the commercial lessee extended payment terms.

Conclusion

As you can see, the law protects you. As a lessor, you are not helpless in the face of this type of practice, which can plunge you into financial difficulties.

With the right support, you can get out of the situation unscathed.

For many years now, we have been offering legal assistance in this type of problem. Take advantage of our know-how!

The important thing is to try to foresee this type of problem in advance, and add clauses to protect you when drafting the lease, even before a tenant signs it. This is a service offered by our specialized lawyers, and can help you avoid many problems later on.

If you have any questions, please contact us using the contact form at the bottom of the page.