How to evict a commercial tenant

Evicting a commercial tenant in the UK is a process governed by specific laws and regulations. As a landlord, it’s crucial to understand these legal frameworks to ensure that eviction is carried out fairly and lawfully. It is also important to understand the notice period you need to give your tenant before eviction.  Here, we provide you with a step-by-step approach to how to evict a commercial tenant.

What is a commercial property?

Before getting into the details of how to evict a commercial tenant, let’s define what a commercial property is. 

A commercial property is any property that is not being used as a domestic dwelling but instead being used for business purposes. Examples of commercial property include industrial properties, such as factories, and offices, leisure properties, such as hotels and sporting facilities, retail shops and shopping centres or healthcare facilities. 

Reasons to evict your commercial tenant

So, why would you be looking to evict your tenant from the commercial property? There are three main reasons as to why you may be looking to evict your tenant. Let’s take a look at this in more detail. 

Non-payment of rent

Under the Commercial Rent Arrears Recovery (CRAR) procedure, commercial landlords in the UK have a direct route to reclaim overdue rent without the need to go through court proceedings. This process allows landlords to appoint a certified enforcement agent who is legally permitted to enter the tenant’s premises. 

The agent can seize and sell the tenant’s goods to make up for the unpaid rent. However, it’s mandatory for landlords to provide the tenant with a seven-day notice before initiating this action.

There are specific criteria that need to be met for the CRAR process to be applicable:

• Commercial property use: The property needs to be used exclusively for commercial purposes.

• Existence of a written lease: There must be an active written lease agreement between the landlord and the tenant.

• Duration of rent arrears: The rent must be overdue by at least seven days.

• Limitation to ‘Pure Rent’: CRAR can only be applied to recover the ‘pure rent’, meaning it does not cover service charges, insurance rents, or any other additional charges for which the tenant is responsible under the lease agreement.

As a landlord, it is crucial to understand these stipulations when considering going down the CRAR route. This will ensure that you are adhering to any legal requirements and managing the property assets properly. 

Breach of terms of the lease 

When managing a commercial property, it’s important to be aware of potential lease breaches. These breaches can range from unauthorised subletting or use of the property to making alterations without permission, or any other actions that go against the agreed terms of the lease.

If you encounter a breach of the commercial lease, the first legal step is to issue a Section 146 notice. This is a formal procedure that requires the involvement of a commercial property solicitor. The solicitor will serve the notice to all parties involved in the lease.

The Section 146 notice is more than just a warning; it specifically details the nature of the breach and outlines what actions are needed, or what compensation is required to solve the issue. 

This notice is a crucial legal document and is an essential step before you can legally reclaim possession of the property. Again, handling this process with professional legal assistance ensures that you adhere to the proper procedures and protect your rights as a landlord.

Breach of the repair condition

If you’re dealing with a property that has fallen into disrepair, it’s important to understand your rights and responsibilities. A property is considered in disrepair when there’s a noticeable decline in its physical condition. If this deterioration is significant enough, it can constitute a breach of the repair responsibilities outlined in the tenant’s lease.

To address this issue and potentially proceed with eviction, you should issue a Section 146 notice. This formal notice should clearly specify the nature of the disrepair and give the tenant a reasonable amount of time to fix the problem.

After this designated period, if the tenant hasn’t fixed the issue, you, as the landlord, have the legal right to either peaceably re-enter the premises or initiate court proceedings to evict the tenant. 

Once again, it’s crucial to handle this process with due diligence and in accordance with legal procedures to ensure a smooth and lawful resolution to the problem. 

It’s safe to say that the process of evicting a commercial tenant will probably never be as smooth sailing as we hope. However, being knowledgeable on the different routes that can be taken will allow you to do so in the most efficient way possible. 

Communicating with your tenant

Effective communication is key. Before taking legal action, discuss the issues with your tenant. Sometimes, a resolution can be found without having to resort to eviction. 

If, for example, the tenant is experiencing financial difficulties, consider negotiating a payment plan with them. Or, offer help with the repairs of the building by sharing a contact with them that you may have who can repair the damage at a good price. 

Seeking legal advice

But what if you can’t solve the problem amicably? There may be times when you may have to resort to seeking legal advice. It’s best to seek legal advice before serving any notice. A solicitor specialising in commercial property law can ensure that the notice is legally compliant and served correctly. This way, you as the landlord are covered, should the situation need to be taken to court. 

Applying for a court order

The worst case scenario is that your tenant refuses to comply with the notice being served, which would result in applying for a court order. This process involves the following: 

• Filing a claim: Submit a claim form to the county court. Include evidence supporting your claim, such as the lease agreement, the notice served, and any communication with the tenant.

• Attending a court hearing: Both parties will have the opportunity to present their case. Be prepared to justify your reasons for wanting to proceed with the eviction.

• Obtaining a possession order: If the court rules in your favour, a possession order will be granted, giving the tenant a date by which they must vacate the premises.

Enforcing the court order

If the tenant still refuses to leave, you can apply for a warrant of possession. Court bailiffs will then be authorised to evict the tenant. Avoid taking matters into your own hands, as illegal eviction can lead to legal ramifications.

Dealing with tenant’s belongings

After eviction, you may find the tenant’s belongings left behind. The Torts (Interference with Goods) Act 1977 requires landlords to handle these items carefully. You must notify the tenant and allow reasonable time to collect them. If unclaimed, you can sell the items but must return any proceeds to the tenant after deducting costs.

Recovering outstanding rent

Post-eviction, you may still need to recover unpaid rent. This can be pursued through a separate legal claim. You may want to consider the tenant’s financial situation and the likelihood of recovery when deciding whether to proceed or not. 

Tips for a smooth eviction process

• Keep records: Maintain detailed records of all communications, payments, and any breaches of the tenant lease.

• Act promptly: Delaying action can complicate the eviction process.

• Understand tenant rights: Be aware of the tenant’s legal rights to ensure a fair process.

• Seek professional help: Utilise the services of solicitors and bailiffs where necessary.

• Stay informed: Keep up-to-date with changes in commercial property law.

Evicting a commercial tenant involves a complex legal process that requires careful handling. Understanding the legal grounds, communicating effectively, and following the correct legal procedures are crucial steps. Always seek legal advice to navigate this process efficiently and lawfully. Remember, a fair and professional approach not only ensures legal compliance but also maintains your reputation as a responsible landlord.

For any information needed on commercial landlord insurance, contact us at CIA Landlords on 01788 818 670.