As a commercial landlord, one of the most challenging aspects of management can often be as simple as a tenant who is not paying rent. If a tenant who is renting business or office space from you is struggling with their financial situation, rent might be one of the first expenses the tenant neglects.
When a commercial real estate tenant stops paying rent, as a landlord, it may feel as if you do not have any immediate tools at your disposal to collect the rent. However, there are some steps you can take right away to start back on the path to solvency.
First signs of struggling companies
Keeping open and effective communication with your tenants is often a good preventative measure you can take even before a tenant stops paying rent. That is because there are often some clear signs that a tenant is struggling. One recent example in Florida is the case of Winn-Dixie. This supermarket chain rents a massive amount of commercial property in Florida under its parent company, Southeastern Grocers LLC. Before it started to look at bankruptcy, it began asking its landlords to lower its lease payments. This is a telltale sign of a company that is struggling.
If your tenant asks to lower a lease payment, you should begin to consider the possibility that the company is struggling and may not be able to pay its rent. Early intervention could help prevent a long and drawn-out case.
Legal protections under Florida statutes
Florida law offers protections for commercial landlords under Chapter 83 of the Florida Statutes. The law surrounding commercial real estate is complex, but as a landlord, you have recourse when your tenants stop paying rent. While eviction is an option, it may not be the most expedient or efficient solution in every case. Sometimes, there are other legal measures that can help you resolve a tenant dispute in a more expedient way.
One of the most important allies in your work as a commercial landlord is a qualified commercial real estate attorney. A lawyer who specializes in this type of law will have the know-how to guide you through even your most thorny issues regarding tenants, contracts and disputes.