Protect Your Assets When a Tenant Defaults!
When a tenant defaults on their lease, the next steps can be complicated—and costly if handled incorrectly. Are you prepared for:
✔ The correct way to terminate a lease and re-enter the premises?
✔ Handling abandoned stock and equipment without legal risk?
✔ Avoiding liability from liquidation or financing claims?
In this quick video, I explain the essential steps landlords must take to protect their assets and avoid unnecessary risks.
Need expert advice? Contact Millens today.
VIDEO TRANSCRIPT
Ross Millen:
I wanted to talk to you today about a situation that some of our landlord clients have been placed in recently where their tenants have defaulted under their leases. Now, we then can prepare a notice of default. Normally, you must give the tenant 14 days to rectify their default. But what happens if they don't? Well, then you're entitled to re-enter and terminate the lease. Now, re-entry, you need to be not using any violence or force, but go at a time, take a locksmith, change the locks. Maybe you need a security guard or your managing agent to go along. In certain circumstances, we then put a notice of termination or notice of re-entry on the premises. But what then happens when there's a whole lot of items of chattels and equipment, maybe stock left behind? What happens with that? Well, you can't seize all that material and sell it. You need to give the tenant an opportunity to come and take it away. And if they don't, well then it's abandoned, and depending upon what your lease says, you can dispose of it or sell it. But there's a few little tricks there. For instance, we probably need to do a company search to make sure that the tenant hasn't gone into liquidation, so then you need to be dealing with a liquidator or an administrator instead. And you need to do a PPSR search because maybe they've got a financing company behind them that has an interest in some of those chattels and the stock, and you need to be dealing with that company instead of the tenant. So there's a number of complications, a number of things that could go wrong, and a number of ways you could end up with a liability you didn't intend. So if you've got any problems with your tenants, got any problems with them abandoning the premises or leaving things behind, contact us, we can look at the lease, we can give you advice to make sure you're not going to waste your money or have a liability you didn't expect. I'm Ross Millen from Millens and I look forward to helping you.
