Commercial Lease Problem

elvina

We have a tenant on a commercial lease who is being difficult! He has had the property since 2014 and has been acting up for the past 18 months or so. His lease ends in 2020. His rent is due on the 1st of each month but for the past year or so, despite being told nearly every month that his rent is due on the 1st, he pays up to a week late every month. The lease doesnt provide for any late payment and is very clear, 1st of the month. He hasnt provided any reason for his late payments and appears to be just doing it to be a pain. Can we start charging him a late payment fee please if we advise him that this is going to happen and if we can what would be a good daily amoun please? There is no mention of late payment fees in the lease. Thanks very much for any advice.

Tom99

Be very careful before charging interest. What does the lease say about non payment of rent?
Charging interest may be seen as acquiescing to the late payment and prevent you exercising other remedies.
Normally a lease provides for forfeiture if rent is unpaid for a certain number of days after which you can send a bailiff.

What is the annual rent?
£10,000pa delayed for 7days at say a lost interest rate of 1.5% is slightly less than £3pa.
You may want to take legal advice but if all you are losing is c£3pa?

elvina

Hi

Thanks for the reply. The lease doesnt say anything at all about late payment or non payment. All it says is that the rent must be paid on the 1st of each month. The monthly rent is £530 and he pays late, up to a week, every month for the past year. Thanks

Tom99

I think I would far rather have a tenant who pays 7days late each month costing me £2pa in lost interest than a tenant who goes bust, does not pay etc.
The lease must make some provision for a breach of covenant surely?