February 14, 2018

Collecting The Rent: Commercial Landlords Should Seize On The Opportunity To Get Paid

Don’t go unpaid. Protect your investment! If your tenant owns property, there’s a solution.

Did you know that as a commercial landlord, you have a very effective remedy at your disposal as against a defaulting tenant?

It is called “distress for rent.” If your tenant does not pay, you can seize the tenant’s property, to pay the rent and any accelerated rent that your agreement allows.

No court order is necessary. We would need to hire a bailiff to complete the seizure. This is the law confirmed by the Civil Enforcement Act in Alberta. This seizure can also take priority over other creditors, in the correct circumstances.

What are the rules?

The law requires a current landlord-tenant relationship, and that there is unpaid rent (whether that is base rent or additional rent or accelerated rent, if that becomes applicable).

It may not apply if the tenant returns possession. Examples of returning possession can be by either returning the keys to the landlord or by the landlord re-entering the premises and changing the locks, or the landlord has told the tenant that the lease is terminated or similarly shows that the tenancy is over.

Once you use this seizure remedy to bring the rent current, the lease cannot be terminated for the reason of non-payment (at least, for that occurrence of late rent). As well, if the tenant has paid, a landlord cannot exercise this seizure remedy (if done when no rent is owing, the landlord can be liable to the tenant).

How soon should you act? Act now — don’t let that ship sail!

If you are a commercial landlord who is owed money and you looking to exercise this powerful remedy, act promptly!

We hope you have enjoyed reading this summary.

Walsh LLP’s Commercial Litigation group are here to help.  Contact us today! Meanwhile, enjoy some more reading!