VIC Commercial Property Rent in Arrears

Discussion in 'Commercial Law Forum' started by Anita Louise, 5 June 2018.

  1. Anita Louise

    Anita Louise Active Member

    Joined:
    12 July 2017
    Messages:
    14
    Likes Received:
    0
    Hi, My ex-husband and I own the freehold on a cafe. We have instructed our Lawyer to send the tenant a Notice to Remedy Breach. There is quite a lot of money owing, round $20,000 in rent (and another $15,000 with other debts). This has been going on for quite a while. They have been trying to sell the business and have had a couple of offers which we know of but haven't accepted them. We were just hoping that they would sell the business and reimburse us. Neither of us can carry this dept any longer. We have had two different people approach us wanting to take over the cafe. One person has offered us $80,000 . If we eventually changed the locks and accepted this offer is it legal for us to keep the $80,000 or would we deduct what is owing to us and give the remaining money to the previous tenant? I like the second option my ex-husband likes the first! For me it's a bit of a moral issue. I'd love some legal opinions. Thanks Anita Louise
     
  2. Rod

    Rod Well-Known Member

    Joined:
    27 May 2014
    Messages:
    4,939
    Likes Received:
    700
    Who paid for the cafe fitout and roughly how much was spent?

    What does the lease say about this situation?
     
    Stop hovering to collapse... Click to collapse... Hover to expand... Click to expand...
  3. Anita Louise

    Anita Louise Active Member

    Joined:
    12 July 2017
    Messages:
    14
    Likes Received:
    0
    The Tenant owns the fit out and they have spent a fair bit of money I would say.
    We have another party who is very interested and doesn't want any of the equipment and would like to spend $250,000 - $300,000 on a major Reno....putting more value on our building, great for us. I really interested in your thoughts. Thanks Anita Louise
     
  4. Rod

    Rod Well-Known Member

    Joined:
    27 May 2014
    Messages:
    4,939
    Likes Received:
    700
    Bearing mind I haven't read the lease agreement and don't know if you registered a PPSA against their fitout:

    1. For $80,000 sale - Seems risky if you have no PPSA and you 'sell' their equipment. The equipment may actually belong to a third party.
    2. For second sale - seems like a reasonable deal but leaves you exposed to a debt owed by your former tenant.

    You probably need the help of lawyer to work through option 1 in detail, or take option 2 and try and chase your debt.
     
    Stop hovering to collapse... Click to collapse... Hover to expand... Click to expand...
  5. Anita Louise

    Anita Louise Active Member

    Joined:
    12 July 2017
    Messages:
    14
    Likes Received:
    0
    Thanks, I appreciate your opinion and that all makes sense. I've just found out the kitchen equipment is leased!
    Anita Louise
     
  6. Clancy

    Clancy Well-Known Member

    Joined:
    6 April 2016
    Messages:
    973
    Likes Received:
    64
    Regarding the 'fit-out'.... Your lease should have a 'make good' clause. That means the lessee has to remove the fit-out at their expense and return the premises to the condition it was in when they moved in.
    That would be allot of work, so you can use that to your advantage and offer to excuse them from the making good clause if they rescind all claim of ownership to the fit out.
     
  7. Anita Louise

    Anita Louise Active Member

    Joined:
    12 July 2017
    Messages:
    14
    Likes Received:
    0
    Hi Clancy, That's for your input, I'll check it out.
     
  8. scott roberts

    scott roberts Member

    Joined:
    19 March 2018
    Messages:
    4
    Likes Received:
    1
    Most landowners should manage an inhabitant financially past due with their sooner or later. On the off chance that that circumstance emerges, what would landlords be able to do to recoup the The conditions of the unfulfilled obligations, and of the , distinctive for each situation yet this note plans to set out a rundown of proprietors' primary choices for recuperation:

    Relinquishment

    CRAR (Commercial Rent Arrears Recovery)

    Seeking after a sub-occupant

    Drawing down on a store

    Seeking after an underwriter or previous occupant

    Serving a statutory request

    Court procedures.

    1. Relinquishment

    Relinquishment, or "reentry", is the proprietor's entitlement to end the rent if the occupant is in rupture of any of its agreements.

    Numerous business leases accommodate the landowner to have the privilege of reentry if lease stays unpaid for a particular timeframe (more often than not in the vicinity of 14 and 21 days). On the off chance that the arrangements for reentry inside the rent have been fulfilled, the proprietor can by and large serenely reappear the property and recoup ownership, in this manner ending the rent. This is finished by entering the property and changing the locks. Care should be taken that no one is involving the property at the season of reentry: this is the reason most re-passages happen either at a young hour toward the beginning of the day or late around evening time.

    Nonetheless, a proprietor should consider whether it bodes well for it to relinquish the rent: is the occupant dissolvable – in which case will the relinquishment put adequate weight on it to pay? Does it need to abandon the premises? In the event that ownership is recouped and the occupant does not have any significant bearing for alleviation from relinquishment, will the property be effortlessly re-let?

    On the off chance that a proprietor is thinking about reentry, it should be exceptionally cautious not to defer its entitlement to reentry: it needs to guarantee that it doesn't play out any demonstration, (for example, tolerating rent) which perceives the rent as yet existing.

    2. CRAR

    In April 2014 misery was nullified, and another methodology for business lease unfulfilled obligations recuperation (CRAR) was presented.

    Basically, the method enables a proprietor of business premises to teach an authorization operator to take control of an occupant's products and pitch them so as to recuperate the estimation of the lease overdue debts. The implementation operator must serve sees on the inhabitant setting out particular data at different stages at which the strategy is utilized.

    In numerous cases, the danger of expelling things from the property which are basic for the inhabitant to complete its business, (for example, PCs, printers, work areas, seats – anything which has a place with the occupant) will be a solid incitement to pay the exceptional back payments so it can keep on trading.

    Landowners should, in any case, contemplate utilizing the methodology in light of the fact that doing as such will forgo any privilege to relinquishment that may have emerged.

    weed lawyer
     
    Stop hovering to collapse... Click to collapse... Hover to expand... Click to expand...
Loading...

Share This Page

Loading...
gt;