When a Commercial Tenant Stops Paying Rent

 Posted on October 14, 2019 in Real Estate

If you are the owner of property that you lease to commercial tenants, you will almost certainly have to deal with lessees who fail to pay their rent on time. While you might offer grace periods or other ways to help your tenants, eventually, one or more of your tenants will probably reach a point where you start to wonder if they have stopped paying altogether. As a commercial landlord, there are a few things to consider and certain steps that you must take before you can begin the process of evicting a commercial tenant.

Reach Out and Talk

As with any human interaction, commercial leasing issues can often be resolved through open and honest communication. Maintaining open communication can catch small issues before they grow into major problems. If your tenant’s payment for the month is late, consider reaching out to find out what is happening. You could make a quick phone call, stop by the business, or even send a friendly text message asking if everything is ok, especially if your tenant has never had trouble paying on time before.

In your communication, ask if your renter’s financial situation has changed substantially. If your tenant has legitimate concerns about being able to afford the obligations of the lease, you might consider offering a modification to the agreement. Depending on the circumstances, you might even offer to let your tenant out of the lease. If you go this route, make it clear that your tenant only has a few days to consider your offer. You could be surprised at how fast he or she finds rent money.

Demand Notices

Even if you would rather evict your tenant and be done with the whole situation, legally, you are required to give the tenant the chance to get caught up. Under Illinois law, you are required to notify the tenant in writing as to the total amount of past-due rent, and you must give the tenant at least five days to pay the amount in full. If he or she does not pay, you can terminate the lease on the sixth day. Only then can you start the process of eviction.

According to the law in Illinois, you have the right to terminate a commercial lease if the tenant fails to make full payment of the past due amount after being provided written notice. However, you could decide to accept a partial payment or some type of payment arrangement. Keep in mind that if you choose not to accept an arrangement or partial payments, you should make this clear in your demand notice.

Work With a Lake County Commercial Leasing Attorney

At Newland & Newland, L.L.P., we work hard to protect the rights of commercial landlords. We understand that a tenant who is not paying rent can cause serious problems, and we are equipped to help. Contact one of our experienced Libertyville commercial real estate lawyers to discuss your situation. Call 847-549-0000 for a free phone consultation today.

Sources:

https://www.thebalancecareers.com/how-to-evict-a-commercial-tenant-behind-in-their-rent-3514906

https://legalbeagle.com/7420659-evict-commercial-business-illinois.html