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When tenant is in default of a commercial lease?

| Mar 1, 2021 | Real Estate |

The landlord should thoroughly assess the process for filing suit so that the landlord can collect money owed. The language on the lease is important to enforce your rights. If you need an experienced real estate attorney to review or draft a contract, please call.

Did your tenant breach a commercial contract? Most commercial leases have default provisions that define “events of default”. The default section of the lease is generally followed by a remedies section providing the landlord four remedies: (1) Termination of the lease, repossession of the premises, and the right to sue for damages (2) termination of the tenant’s right to possession, repossession of the premises, and the right to sue for rent (3) the right to perform the tenant’s lease obligations and charge the tenant for the services (4) and the right of the landlord to not only terminate the lease but forfeit the lease.

If the tenant has left the leased property and has failed to pay rent, the landlord can treat the tenant’s decisions as an anticipatory repudiation of the lease or an anticipatory breach. In anticipatory repudiation, the landlord may terminate the lease and sue for damages. Damages usually are established as the rent accumulates. In an anticipatory breach, the landlord can terminate the lease and forfeit the property. One way of calculating the damages for the rent that may accumulate over time is that it is the difference between the contract rent and the fair market rent for the remainder of the term discounted to its present value. If you find yourself in a similar situation, we invite you to contact us.

Tenants that have neither abandoned nor vacated the leased premises but have ceased paying rent are probably in default. A landlord may terminate the tenant’s right of possession without terminating the lease. This allows to sue for the rent instead of the damages. See, TEX. PROP. CODE ANN. § 24.002(a)(1).

Are you a landlord? Do you need to update your commercial lease. Our experienced attorneys want to help you obtain the funds due to you. We are here to help review your contracts and draft and updated contract that fits your needs. If you need assistance with a specific service or need legal consultation, we welcome you to contact us at 713-572-4900.

 

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