Running a business is rarely smooth sailing. Your company is likely to experience great periods and bad periods of trade. Regardless of business conditions, you, as the commercial tenant, must still pay rent to your commercial landlord. If your business has fallen on hard times, you may fall behind on rent payments. When you experience rent arrears, you breach your commercial lease. Consequently, you will likely lose your commercial premises if you, as the commercial tenant, cannot make rent payments. Worse still, you may also receive a court order requiring you to pay your commercial rent arrears. You may also be required to pay your landlord\u2019s court costs for the commercial rent arrears recovery. This article will outline four options available to you if you are falling behind on rent payments for your shop. <\/p>\n\n\n\n
Speaking to your commercial landlord and trying to negotiate is a good first step if you are behind on your rent payments. Failure to take action may result in your commercial landlord instigating court proceedings. You do not want this as you will likely be ordered to pay the rent arrears and the landlord\u2019s court costs. <\/p>\n\n\n\n
When negotiating with your landlord, tell them why you fail to pay rent on time. For example, perhaps your shop trade is low because your business is seasonal. If this is the case, explain to your landlord that you can clear the arrears when your business reaches peak season. Also, you will be able to continually make rent payments on time. Once your commercial landlord understands your situation, you both may be able to reach a solution. This might be, for example:<\/p>\n\n\n\n
The latter option is beneficial for you as a shop owner. A turnover rent clause means that you only make rent payments that fairly represent your turnover. In practice, while your shop trade is low, your rent will be lower. When your business reaches peak season, your rent will gradually increase to reflect the increase in trade. Commercial landlords may benefit from this as while their earnings will fluctuate, the security of their earnings will likely improve as the tenant is likely to stay. If you do reach an amicable agreement, ensure you both record it in a written document. <\/p>\n\n\n\n
Sub-leasing part of your shop and sharing your commercial premises with another business is a good second option. Sub-leasing is where you, the tenant, lease part of your premises to another business owner, who then becomes the sub-tenant. As the tenant, you become the incumbent sub-tenant\u2019s landlord. Due to occupying part of your commercial premises, the sub-tenant will pay you rent. This could help you to meet your current rent obligations and allow you to clear the arrears gradually. However, you are still responsible for your current lease and for passing the rent to your landlord.\u00a0<\/p>\n\n\n\n
To sublease your shop, you will first need your landlord’s permission. You should first check your commercial lease agreement to see if your landlord has given written permission. Before you sublease your shop, you should consider if the layout of your shop would be suitable. Also, you should consider if the sub-tenant\u2019s business complements or directly competes with your business. <\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n