When tenants fail to pay rent or breach their lease obligations, our specialist solicitors help landlords recover debts, enforce leases and regain possession swiftly and effectively.
Tenant default — whether through unpaid rent, failure to comply with lease obligations, insolvency, or outright abandonment — is one of the most serious challenges a commercial landlord faces. Handling it incorrectly can cost thousands of pounds and jeopardise your right to recover the property. Legal Merchant's specialist solicitors advise landlords across England and Wales on the full range of remedies available when a tenant defaults.
Non-payment of rent is the most common form of tenant default. When rent falls into arrears, a landlord has several remedies available, which can be used individually or in combination:
Available only for commercial premises. An enforcement agent (formerly a bailiff) can seize and sell the tenant's goods on the premises to recover the equivalent of up to 7 days' net unpaid rent. Must be conducted by a certificated enforcement agent; at least 7 days' notice must be given.
Where the lease contains a forfeiture clause (as most commercial leases do), the landlord can forfeit for non-payment of rent by peaceable re-entry (changing the locks) once the rent is more than 21 days overdue — without a court order. Care must be taken to avoid waiver.
A claim in the County Court or High Court for the arrears and interest. Once judgment is obtained, further enforcement options are available including a charging order over the tenant's property, attachment of earnings, or third-party debt order.
Where the tenant's obligations are guaranteed (e.g. by a parent company or individual guarantor), the guarantor can be pursued for the arrears. The guarantor's liability depends on the terms of the guarantee.
Where a lease was assigned after 1 January 1996 and the assignor gave an Authorised Guarantee Agreement (AGA), the former tenant remains liable for the assignee's defaults. Liability must be claimed within 6 months of the debt becoming due.
Where the tenant is a company with undisputed arrears, the landlord can serve a statutory demand and, if unpaid within 21 days, present a winding-up petition. This is a powerful remedy but must be used with caution — it can trigger insolvency and moratoriums.
Tenant insolvency requires careful handling. When a tenant company enters administration, the landlord's ability to forfeit, exercise CRAR, or bring proceedings is restricted by a moratorium. Our solicitors advise on:
If a tenant abandons the premises (leaves without formally surrendering the lease), the landlord must be careful. The lease continues to run and the tenant remains liable for rent until the lease expires or is validly determined. Taking back the property without the tenant's agreement may operate as an implied surrender, which could be to the landlord's disadvantage if there is a solvent guarantor. Our solicitors advise on the safest approach.
Beyond rent arrears, tenant default can include breach of repairing obligations, unauthorised alterations, subletting or assignment without consent, breach of user covenants and failure to comply with statutory requirements. Our solicitors advise on section 146 notices, injunctions and damages for these breaches.
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