Commercial Debt Recovery and Collection

Debt Recovery

No matter how wisely you choose your tenants, whether residential or commercial, you can't guarantee that your rent will be paid on time. Having a tenant who is in rental arrears is an extremely taxing situation for all landlords, resulting in potentially problematic issues with cash-flow and causing stress to all involved. If you have found yourself in the unfortunate position of being owed rent by your tenant, recovering your debt will be your main concern.

Do I have the legal right to recover my debt?

Yes. As a landlord, you not only have the right to receive rent from your tenant, you also have the right to recover any rent that your tenant fails to pay. If you and your tenant are in the midst of a disagreement, your tenant may be purposefully withholding rent from you. It is common for tenants to believe they have the right to not pay rent until disputes with their landlords are resolved, but this isn't true; tenants are legally required to pay their rent to their landlords as per the terms set out in their lease, regardless of whether or not a dispute is being waged. Unfortunately, recovering unpaid debt from a tenant isn't always easy and may require the court's intervention

I want to take my tenant to court - where do I begin?

Before you begin legal proceedings against your tenant, you should speak to your tenant about the debt. It is possible that you will be able to come to a solution without having to take the issue to court, such as by setting up a payment plan.

What if my tenant won’t pay?

If your tenant fails to pay the rent you are owed, you may need to apply for a County Court Judgement in order to commence official debt recovery proceedings. Before you take your client to court, you will need to issue a pre-notice letter, clearly advising your tenant of your intention to take them to court. You will also need to gather evidence of the debt to show to the court and prove that you have made a considerable effort to resolve the matter outside of court.

What is the outcome likely to be?

If you can prove that you are owed money from your tenant, the court is likely to rule in your favour and register a CCJ against your tenant. Notice of the CCJ will be to your tenant and he or she will be given 14 days to pay back the debt before the CCJ is officially issued. Once a CCJ has been registered, you will be able to obtain a further court order to recover the money you are owed. The court may implement a payment plan or issue an attachment of earnings order. An attachment of earnings is a type of payment plan in which money is taken directly from your tenant’s monthly salary. An attachment of earnings order is only an option if your tenant is in employment.

How can I get the Bailiffs involved?

Once a CCJ has been registered against your tenant, you will have the right to commence enforcement proceedings and enlist the help of High Court Enforcers if your tenant continues to withhold rent. The role of a High Court Enforcer is to identify whether or not your tenant owns any items of value that could be sold to pay off his debt. Items of value will be ceased by the Enforcer and sold at auction.

Why is debt recovery an issue that requires the help of a solicitor?

Taking your tenant to court can be an extremely long and costly process. To make sure you get the best possible result, you should contact a solicitor. A solicitor will guide you through the debt recovery process, representing you in court and helping you to make decisions that minimise risk to you.

How can Pabla & Pabla Solicitors help me?

We understand how stressful being owed money to be; it is therefore our aim to resolve all debt recovery issues quickly and efficiently. Our commercial property team can advise our clients regarding the setting up of debt recovery payment plans and help them to secure Attachment of earnings orders against tenants who continue to withhold payment. We can also commence enforcement proceedings, helping to reduce stress to our clients by enlisting the help of High Court Enforcers. Contact us today to discuss your situation and learn how we can help to recover debts that ae owed to you.

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