Commercial Lease - Tenant wants out

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    Commercial Lease - Tenant wants out

    Commercial Lease, 3 Years with 18 month break. 2 months early possession. Ltd Company with Personal Guarantor.

    1st month into lease start and receive an email from tenant saying they are having financial problems and can't pay so will return the keys.

    I obviously want to hold them to the 18 months rent commitment and pursue them for that.

    What's the best course of action from here? One month in can I start enforcement for the whole min term or just the outstanding amount?

    Any advice welcome, not been in this position before with a commercial tenant.

    You can only sue for rent which is due.

    You have to make what is a business decision. Do you maintain the lease and hope you get the rent for the next 18 months or call it a day and forfeit or accept a surrender? Bear in mind that if the tenant does not have the rent while in occupation he is unlikely to have it if not trading. At least the tenant does not have his head in the sand.


      Many thanks, I did ask a solicitor online also and they advised to either let the 18 months run before enforcement or enforce now (month 1), take possession and claim the amount due until it is re-let?


        If you go into possession you end the lease and with it the right to any rent from the date of possession. Whilst offering the property to let on the open market may not amount to taking possession it is a risk according to precisely what you do. Bear in mind that if you maintain the lease is continuing you cannot exclude the tenant.

        If you think you can easily relet then you may be better off with some sort of a clean break. You do have a guarantor so you can exercise some pressure. A premium for a surrender can be paid by instalments.


          I suggest you reply by saying you will accept back the keys for the purpose of putting the property on the market with an agent without accepting surrender, on the understanding that you will accept surrender immediately prior to granting a new lease. By this course of action the existing tenant remains liable for the rates. You may be surprised: I recently had two small adjoining units fall vacant and both were let within a month, albeit that my mentality was to undercut every other offering in the town and let fairly cheaply to get these units away


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