Can I repossess a commercial property if the tenant isn't paying rent?

Published 07 Sep 2018

If you've been a commercial landlord for years, then it's very possible that you've encountered a few tenants over the years who've missed their rent payments. While once or twice can be considered a harmless mistake, what if the tenant of your business site can't or won't make their scheduled settlement? Is it possible for commercial property owners in NSW to repossess a property if their tenant isn't paying rent?

First steps

Repossessing a property is a serious step - it can damage a positive landlord-tenant relationship and create undue stress, so it's better used as a last resort. If the business owner renting your property is consistently late on their payments, or has missed a rent cycle entirely, remind them about their lease obligations. Start with a letter or phone call, and if they continue to not respond, try and arrange an in-person meeting.

If they still are not forthcoming with rent payments, you can then serve your tenant with a termination notice. This period will be dictated in your commercial lease, but two weeks is the standard period of time to vacate the property. The notice must be:

  • Properly drafted in writing.
  • Signed and dated by you or your managing agent.
  • Stipulates your reasons for serving the notice and relays the tenant's obligations for exiting the commercial lease.

Applying to the Tenancy Tribunal

If your tenant still hasn't vacated the property following this 14-day period, you can apply for assistance from the Tenancy Tribunal. This body handles disputes between landlords and lease holders, both commercial and residential, in NSW. They can enforce orders regarding exiting the commercial property, make an order to terminate the tenancy regardless of late payments and even help you recover bank fees or other financial penalties incurred by tenants.

Repossessing your commercial property

If this is still ineffective, you can seek an order from the NSW Supreme Court to get the Sheriff's assistance. From there, you can:

  • peaceably enter the property and change the locks, informing the tenant they have been evicted; or
  • the Sheriff's office can forcibly evict your tenant themselves.

It's vital to remember that a warrant for this action is needed. If you try to force a tenant to leave without Supreme Court backing, you can be found in breach of your tenancy agreement.

Commercial law can be tricky to tackle without the help of an expert solicitor - for help with any commercial property dispute you may have, contact Malouf Solicitors today for help.

Please call us on 02 8833 2000 to speak with a lawyer

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