Business owners across Texas sign commercial leases and rent out commercial spaces to display their products and meet with customers. This is generally more affordable for small business owners and start-ups than buying up real estate themselves. Commercial leases are B2B and generally more complex than a standard rental agreement. The length of the lease is also significantly longer, and may even span for years. This can be detrimental to the leaser, should the business owner fall behind on payments because they have more time to bury themselves in a hole. It can also be more difficult to find new lessees for commercial properties. An eviction would be tough on both parties, so it’s best to find a way to make up back payments before that becomes a reality. SWR can help. At Southwest Recovery Services, we offer tailor-made solutions for commercial property management companies so you can improve cash flow and protect your bottom line.
Sometimes business owners fall behind on rent because they can’t manage annual rent increases. This is something a savvy business owner would be prepared for since most commercial leases stipulate the percentage rent will rise each year to keep up with fluctuations in the economy. Commercial leases also offer more latitude to negotiate and business owners should know their limitations and set rent increase caps before signing to ensure they don’t end up with an unmanageable debt.
This impacts renters who aren’t ready to leave the premises by the date designated on their lease, who also don’t wish to renew. They may not be in the financial position to move or maybe just haven’t found a location that suits their business yet. For these reasons, they may choose to extend their stay. Oftentimes, property owners such as yourself will graciously allow this but charge more due to the inconvenience. The industry standard for this is anywhere between 125-250% of the tenant’s regular monthly rent. This amount can be a lot for small businesses and they may soon find that it’s out of their budget.
Late Rent Payments
The most common scenario in commercial rental collections is of course late payments. Whether due to economic factors or lack of responsibility this common problem can accrue a hefty debt quickly. It’s important to hold them accountable before it sets a precedent and you start seeing missed payments month after month.
Southwest Recovery Can Help
Commercial property owners and management companies should avoid intricate legal procedures and lengthy court proceedings to collect on debt whenever possible. Particularly hostile proceedings can cause you to lose a lot of money, mar your reputation, and permanently ruin your relationship with the tenant. Southwest Recovery Services’ agents can help you avoid this by structuring repayment plans, creating a system for monitoring payments, and tracking down evicted tenants, and holding them accountable. Allow us to help you protect your business and reputation and maximize revenue using our ethical and effective approach to debt collection. Commercial tenant debts are among the most challenging to collect. Don’t go at it alone!