Commercial Landlord Rights: What Options are Available for Landlords Dealing With Financially Distressed Tenants?
For commercial landlords, it can be deeply frustrating to have a tenant fall behind on their rental obligations. The loss of the reliable rental income stream can cause you and your company major financial headaches. At this point, you need to be ready to carefully assess your available options so that you can best protect the interests of your business. In this post, our top-rated West Palm Beach landlord-tenant litigation attorneys highlight the three basic options that are available for commercial landlords who are dealing with a financially distressed tenant.
Three Ways to Handle a Financially Distressed Commercial Tenant
- Encourage a Subletting Arrangement
In certain circumstances, the best available option will be to work with the cash-strapped commercial tenant, in order to come up with a viable assignment or subletting arrangement. In some cases, it might make sense for a tenant to assign their whole space to another party. In other cases, you may be able to sublet a relatively small portion of the space to get enough income flowing to cover the full value of the rent.
- Negotiate a Lease Workout
While certainly not ideal in the abstract, there are some cases in which ‘lease workouts’ are the best available option. In the most simple terms, a lease workout is a restructuring of the lease, in order to find an agreement that works for both parties. As a landlord, there may be times in which it makes sense to give a tenant some ground on a lease workout. For example, if you have a reliable commercial tenant who is having some short-term issues, lease restructuring may be the best option. Likewise, if you believe that it will be extremely difficult to rent the commercial space to another party in the event that your current tenant vacates, a lease workout may be advisable.
- Take Action to Evict the Tenant
Finally, there are certainly cases in which eviction will prove to be the best available option. If you are considering taking action to evict a commercial tenant in South Florida, there are several different factors that you should keep in mind. To start, you should carefully consider the current rental value of the property. Pushing aggressively for eviction is not always the best business decision. In addition, you need to make sure that the eviction process is carried out in the properly. Under Florida state law, self-help evictions are prohibited. You should work with an experienced Florida landlord-tenant attorney who can help you carry out the eviction in the most efficient manner.
Speak to a Commercial Landlord Rights Attorney Today
At Pike & Lustig, LLP our skilled landlord-tenant litigation lawyers have extensive experience representing commercial landlords. If you are a landlord with a financially distressed commercial tenant, please do not hesitate to contact our law firm today for a free case evaluation. From our offices in West Palm Beach and Miami, we represent landlords throughout the region, including in Wellington, Lake Worth, Palm Beach Gardens, and Jupiter.