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My commercial tenant has stopped paying rent. What should I do?

On Behalf of | Feb 14, 2023 | Commercial Real Estate |

Failure to pay rent is one of the leading causes of landlord-tenant disputes. When a tenant fails to pay rent on a commercial property, the landlord has a right to enforce the rental agreement. But exactly how do you enforce this?

Pretty much every lease agreement requires the tenant to pay rent on a specific date of the month. Under California law, a landlord does not have to give a commercial tenant a grace period before imposing a late fine or taking steps to terminate the tenancy contract

California’s 3-day notice to pay or leave

When the tenant fails to pay rent, and the grace period, if any, is passed, you may give them a three-day notice to pay rent or vacate the commercial property. In the notice, you should specify that the eviction process will commence if they do not pay rent or leave within the stipulated grace period.

Here is what you need to include in this 3-day notice

  • The amount of rent due
  • The tenant’s name and contact
  • The date the tenant was served with the demand
  • Information about how and where they should pay the rent
  • A statement about what will happen after the expiry of the 3-day period

Delivering the notice

You can serve the 3-day notice to pay rent or leave the premises through:

  • Personal delivery – you can personally hand the notice to the tenant at the rented property
  • Through a third party or mail – if you cannot find the tenant at the rented property, then you mail them a copy of the document

Safeguarding your rights

Dealing with a commercial tenant who won’t pay rent can be a tricky business. Before deciding how to go about it, think about what you want to achieve, including whether you want to maintain or end the landlord–tenant relationship.