Can't hurt to ask

[MYstIC G]

Not 100% sure who knows what about me in the real world as it were but basically I work with my Dad on our family businesses.

One of the businesses owns property which is partially rented out, partially retained for our own business use.

We've currently got a tenant in one of the properties who is renting a shop unit who is in the 3rd quarter of the 1st year of their lease (Y1Q3). So far they have defaulted twice. In this instance defaulted means that the rent deposit we hold has had to be used to cover a quarters rent payment with the tenant then having 20 or so days to give us the cash to replace the funds used from the rent deposit.

The thing is that things always start like this and then it'll go down the road of "can't repay deposit" then "can't repay deposit + another unpaid quarter" and so on.

So, basically I'm wondering if any of the Freddies out in the wilderness deal with commercial property in any way and have any advice on what they might do in this scenario.

Cheers
Rob / MYstIC G

NB: My gut feeling is cap it off now but nowadays a tenant paying no rent is better than no tenant at all because no tenant at all = pay the rates!

 

[Tom]

Come down on them hard. Either they're genuine and want to pay but can't, or they're taking the piss.

Either way if you let it slide then either case will take the piss.

 

[xane]

I think you should act now.

I knew someone who thought nothing of being 3 years behind in commercial rent, and still complained like hell when he got evicted.

 

[Cadelin]

From what you have said so far they have always paid albiet upto 20 days late. Surely the first thing to do is to find out why? 3 months rent can be alot for a small business that has just started even if it is doing well.

Surely another important issue to consider if how easily can you find a replacement? The harder it is the more you should work with your existing clients to solve any problems they have?

 

[MYstIC G]

Come down on them hard. Either they're genuine and want to pay but can't, or they're taking the piss.

Either way if you let it slide then either case will take the piss.

That's my thinking at the moment.

I think you should act now.

I knew someone who thought nothing of being 3 years behind in commercial rent, and still complained like hell when he got evicted.

Dealt with someone similar to this previously. He ended up in court with us and got a charge slapped on his house, so (thankfully) we got all our cash back. However I'll be fucked if I'm playing that game again! As for complaining, when we went to court, he complained to the judge that I'd misspelt his name wrong on some letters I'd written like 5 years ago, what that was about I'll never know!

From what you have said so far they have always paid albiet upto 20 days late. Surely the first thing to do is to find out why? 3 months rent can be alot for a small business that has just started even if it is doing well.

Surely another important issue to consider if how easily can you find a replacement? The harder it is the more you should work with your existing clients to solve any problems they have?

I think your second paragraph is perhaps why I'm hesitating Cadelin.

Whilst I understand small business start-up pressures, I can't say that I'm very sympathetic as we're only small (in real terms) so I can't justify taking a hit and seeing what happens. In this instance without a shop there is no business, so after the Government we should be the last people the tenant wants to fuck with.

On the other hand though, we're seriously busy at the moment and finding shop tenants is a right bastard (taken 12 months to get someone who wasn't 100% time wasting). Though having said that I could probably do with finding a top notch lettings agent as we don't really have one for the retail properties.

 

[Cadelin]

Whilst I understand small business start-up pressures, I can't say that I'm very sympathetic as we're only small (in real terms) so I can't justify taking a hit and seeing what happens. In this instance without a shop there is no business, so after the Government we should be the last people the tenant wants to fuck with.

I am not saying you should accept not being paid fully but the reason for the late payments may be for a genuine reason. Offering to let them pay monthly or at some other point in the month may make it that much easier for them.

 

[Lester]

Mystic,

seems funny after reading the other thread about Krytens situation.

If they can't pay the rent, then it's obvious that their business is suffering or you are not the priority.

I have commercial property and you have to take a view on lots of factors:

what is their business?
does it have a future?
is it just a seasonal thing (i.e. it's June - do they sell woolly jumpers)?
what is the market like for new tenants (are you in a good retail area for instance)?
can you afford to wait for rent or to lose a month or twos payments?

These are all factors so difficult to know your true position, but amongst all the things that businesses have to pay, rent is rarely the priority. Why? because it will take a long while and lots of effort to get them out.

You can bet that they are paying wages, electricity, VAT, and stock etc (also their own mortgage), because those bills won't wait, you will. It's horrible being hard, but unless you are up for a charity award, you should crack the whip. Go in every week for a payment of some sort and possibly advertise the place for a new tenant.

Spoken like a true capitalist.

 

[Yaka]

we had problems like these all the time, wife convinced me and my dad to go to an estate agent to handle all the aggro, so glad i dont have to think stuff like this any more even tho we pay someone for it.



to avoid paying the rates on empty property you could take it to a tribunal its a time consuming process but its an option