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Commercial rent landlords
Unlock effective strategies for commercial rent recovery and secure timely payments as a landlord.Your entitlement
Commercial landlords which issue a rent Invoice can charge statutory late interest based on The Late Payments of Commercial Debt Regulations 2013.
Cash Flow Issues
Challenges Faced by Commercial Landlords
It is common practice for commercial landlords to issue a (VAT) rent demand/invoice to their commercial tenants for the coming month. Unfortunately, almost half of all businesses do not pay rent on time causing major cash flow issues to their landlords. This is especially prevalent amongst businesses renting industrial premises with 22% of commercial landlords reporting to have tenants in constant arrears. The financial strain this puts on commercial landlords can be immense especially when the property is financed/mortgaged.
Debt Recovery
Regulations for Rent Arrears Recovery
The Late Payments of Commercial Debt Regulations 2013 is a grossly underutilised piece of legislation which enables any business (including commercial landlords) to charge Interest, admin and compensation charges for having to chase a debt/invoice which has become overdue. Rent which is in arrears is essentially an overdue debt and so Interest and admin charges can be added and pursued as restitution to the Landlord. Our free SaaS platform enables any SME/Landlord to recover rent arrears without any additional costs to them. We simply add statutory late fees as per the legislation and charge it to the commercial tenant which becomes part of the Rental balance due and usually covers our fee.Any Landlord can simply create a free account and upload their rental invoices to the platform. It immediately calculates how much the late fees are per invoice and provides Landlords with options as to how they want us to communicate with the Tenant.Exploring Alternatives
Commercial Rent Arrears Recovery
It is also worth knowing however that there are other strident ways to recover commercial rent. One other route is via the Commercial Rent Arrears Recovery (CRAR) which was first introduced in April 2014.The 'CRAR' procedure allows for a commercial property landlord to instruct an enforcement agent to take control of a tenant's goods and sell them in order to recover the value of the rent arrears. Multiple notices must be served on the tenant setting out specific information at various stages and rent must be at least 7 days overdue.
Strategic Considerations
Rent Arrears Recovery for Timely Payments
The threat of removing items crucial to the successful running of the tenant's business, e.g. IT, computers, printers, phones, desks, chairs, etc., can often be a strong stimulus for the tenant to pay the rent arrears so that it can continue to trade.Landlords should, however, think carefully about using the procedure because doing so will waive any right to forfeiture that may have arisen. It is also a much more combative approach to simply adding late fees and could take longer to recover the balance, especially if goods do have to be sold in order to raise the money.Legal Resolution
Utilizing Statutory Demands for Swift Resolution
An alternative to this is to serve a written statutory demand. This is a written demand for payment which complies with certain statutory requirements, and which is served upon the tenant. The amount demanded and owed by the tenant must be more than £750 for commercial tenants. If payment is not made by the tenant within three weeks, the landlord can issue a petition to wind up the tenant's business, which can often result in the commercial rent arrears being paid swiftly.
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Tired of chasing persistently late invoice payers?
We help businesses retrieve late fees arising from overdue and unpaid B2B invoices and implement effective credit control measures to get you paid on time.
We help businesses retrieve late fees arising from overdue and unpaid B2B invoices and implement effective credit control measures to get you paid on time.
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