What is a Demand for Commercial Rent?
A demand for commercial rent gives formal notice to tenants that the rent and/or additional rent (e.g. utilities) due and owing under the tenancy agreement are unpaid. It outlines the parties involved, the amount of rent and additional rent owing, and demands payment on or before a certain date.
Why should a landlord use one?
Most standard commercial tenancy agreements require the landlord to give notice of unpaid rent before further action can be taken. Even when not required, it is usually a good idea to issue a formal demand for rent before taking the next steps, especially if the landlord wants to preserve an amicable relationship with the tenant.
When is a Demand for Commercial Rent used?
Unless the tenancy agreement states otherwise, formal demand notice can usually be issued as soon as rent is not paid when it ought to have been. This means if rent is due on the first of the month, notice can be issued as early as midnight on the second of the month.
How should a Demand for Commercial Rent be issued?
The first step is to check the “Delivery” and/or “Notice” sections of the tenancy agreement to see if a certain method of delivery is specified. If not, a verifiable method such as registered mail or hand delivery should be used. Correspondence by email or text message will in almost all cases not be considered legally insufficient if the landlord eventually chooses to seize the goods or terminate the lease.
Where should a Demand for Commercial Rent be issued?
When delivering formal correspondence related to tenancy issues one should always be sure to include all addresses and recipients that may be required. This includes not only the address of the rental unit but also any alternative delivery addresses included in the tenancy agreement and/or addresses for any listed indemnifiers or guarantors.
What happens next?
If the rent remains unpaid after the date demanded on your notice the landlord will typically have two options:
- Have a bailiff seize and sell the goods of the tenant to recoup the unpaid rent. In most provinces, the landlord loses the right to sue the tenant for the arrears if this option is taken.
- Terminate the tenancy by changing the locks and posting a Notice of Termination and a Notice to Quit. In most provinces, the landlord retains their right to sue the tenant for the unpaid arrears when this option is taken.
If you are unsure which option is right for you, contact a lawyer in your area for clarification.
