commercial lease default letter template

Commercial Lease Default: Understanding Remedies and Best Practices

When a tenant defaults on their rent payment, it can be a stressful and overwhelming experience for both landlords and tenants. However, as a landlord, it's essential to understand your options and take prompt action to recover any outstanding amounts. In this article, we'll explore the different remedies available to landlords in case of commercial lease default, including distraint for non-payment of rent.

The Right of Distress

In Canada, the right of distress is a common law remedy that allows landlords to seize goods found on the leased premises as security for payment of outstanding rent. This self-help remedy is only applicable when the tenant has sufficient goods to satisfy the rent arrears. The landlord's right to distrain arises upon non-payment of rent and can be exercised without any prior notice to the tenant.

Other Remedies

In addition to distraint, there are two other remedies available to landlords in case of commercial lease default:

1. Affirm the Lease: This involves continuing with the original terms of the lease and suing the tenant for outstanding rent.

2. Terminate the Lease: In some cases, it may be necessary to terminate the lease agreement altogether.

Statutory Provisions

It's essential to note that the right of distress is governed by the Rent Distress Act (R.S.B.C. 1996, c. 253) and other related statutes, such as the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3).

Best Practices

Before taking any action, it's crucial to consult with a lawyer who can advise on the best course of action in your specific situation. Here are some practical considerations to keep in mind:

* Review the lease agreement to understand the terms and conditions.

* Assess the tenant's financial situation to determine whether they have sufficient goods to satisfy the rent arrears.

* Consider the potential consequences of distraint, including damage to the relationship with the tenant.

Commercial lease default can be a challenging experience for landlords. By understanding your options and taking prompt action, you can recover outstanding amounts and minimize any potential losses. Remember that the best remedy will depend on the specific circumstances of each case, so it's essential to seek professional advice before making any decisions.

Commercial lease default letter template