Warning letter to commercial tenant about rent (or other payment) arrears
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What's a warning letter to a commercial tenant about rent (or other payment) arrears and when do you need one?
You can use this template letter where:
- the tenant is late in paying rent, or another contractual payment, such as a service charge and
- you have already sent the rent payment reminder letter
This document is not for use by residential landlords and tenants.
The tone of the letter may not be suitable for all circumstances. Depending on the relationship between the landlord and tenant, the landlord may want to take a tougher stance and specifically address its forfeiture rights (albeit that these are currently suspended) or they may wish to adopt a softer approach in which the landlord suggests a without prejudice conversation about current financial difficulties.
It may also be a good idea to take property litigation advice here.
If the tenant still does not make payment after this letter has been sent, our expert partners advise that legal expertise is sought, since this may be turning into a more serious situation and communications sent from now on may need to take a far more formal and legal tone. There are particular legal protocols that will need to be followed by most landlords at this stage.
Make sure that your terminology in this letter is consistent with the definitions and terminology contained in your lease document.
So, for example, if Rent is described as ‘Annual Rent’ in your lease, you should continue to use the same definition of it here in this letter too. This ensures there can be no ambiguity in what you state and agree in this letter and both the tenant and you are clear on what is intended.
You should normally expect to have the right to charge late payment interest on late payments under the lease. A well-drafted lease should contain this provision. Do double check that yours does as you may not be able to charge it if your lease does not include it.
If you have any questions about this template or would like to talk to an expert about the circumstances in which you may be creating it, our speak to an adviser service service is perfectly placed to help you.