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  3. My Tenant Failed to Make Payments Under the Terms of the Lease. Can I Pursue a Former Tenant, Guarantor, or Tenant?

My Tenant Failed to Make Payments Under the Terms of the Lease. Can I Pursue a Former Tenant, Guarantor, or Tenant?

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Blogs Property Litigation
4 minutes reading time

If you are a landlord of commercial premises and your tenant has failed to make a payment due under the terms of the lease; such as rent, insurance or service charge then in addition to pursuing your tenant for non-payment, you may also be able to pursue a former tenant or former guarantor as well as any existing guarantor to recover the sums due.

Where there is;

  • a former tenant or former guarantor under a lease entered into before 1 January 1996; or
  • a former tenant who gave an Authorised Guarantee Agreement on the assignment of a lease or a guarantor who guaranteed a former tenant’s obligations under an Authorised Guarantee Agreement for leases dated on or after 1 January 1996,

then you can pursue them to recover the arrears, in addition to suing your tenant for non-payment.

Once the tenant has failed to make the payment and a debt arises, the landlord must first serve a notice on the former tenant, former guarantor, a former tenant under the Authorised Guarantee Agreement or the guarantor of the Authorised Guarantee Agreement pursuant to section 17 of the Landlord and Tenant (Covenants) Act 1995 within 6 months of the debt arising to be able to recover the debt from them.

If no notice is served then the right to recover the debt from them will be lost and the landlord will only be able to recover the debt from the existing tenant.

If multiple payments are missed by the tenant, then multiple notices will need to be served by the landlord within 6 months of the debt arising to protect its position.

This is one of many options available to a commercial landlord to recover payments due under the lease. Myerson can advise you on all of your options and manage the whole process for you from start to finish to protect your position and maximise your ability to recover the sums due to you.

Further information

Should you require any further information regarding how COVID-19 might impact a property purchase, you can contact a member of our dedicated Real Estate Litigation team on 0161 9414000 or at lawyers@myerson.co.uk

We also recommend paying close attention to any new government guidance at www.gov.uk and following our COVID-19 blog series Click here to view.