Commercial property owners and commercial property management companies lease out office and industrial space to meet the needs of their clients. Commercial leases are B2B and much more detailed and complex than a standard home rental agreement. The length of the lease is usually longer and may span many years. In the past couple of years, more companies have downsized, closed offices or have declined renewing their leases. The “work from home” option has helped empty out a lot of commercial office spaces. Then there are the tenants who have failed to pay their rent as agreed and moved out or allowed themselves to be evicted. When a tenant stops paying rent or has broken their lease, this can be detrimental to a commercial property owner or management company. Evictions are hugely expensive for any company to deal with. Tenants who are on long term leases but who leave early in the term cause a financial burden to a commercial property management company. Some property managers will often abandon rent collection after a tenant has moved out.
When a commercial tenant defaults on a lease the landlord must consider the cost and efficiency in filing suit. Deciding if it’s worth pursuing a tenant after they have left and the amount of money owed is a factor to be considered. How much damage to the bottom line will this have if we just let it go? Is there a personal guarantee on the lease that allows for the pursuit of an individual in addition to the business? Are there multiple guarantors that can be pursued? Did the tenant just move to another location but still appear to be in business? Did the tenant file bankruptcy? Did the business get bought out or merge with another company? Is there a way to get the new company to honor the remaining portion of the lease? The amount of time and resources to address these challenges is taking time away from the core business focus.
Partnering with a skilled Third-Party collection company that specializes in commercial property management accounts is key in having any chance to recover lost tenant revenue. Southwest Recovery Services is skilled at locating tenants who may have skipped out and moved to another location. Evictions where the tenant is operating at a new location may be something that can be salvaged with some kind or recovery. Tenants who have closed up their business but there is a personal guarantee on the lease can be aggressively pursued. These accounts are able to be reported to the consumer credit reporting agencies and will be evaluated for legal action.
Our recovery rates are almost double the industry average so contact us today for a review and assessment. Let’s see if we can provide you with some solutions!