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Where Are We Headed with Delinquent Commercial Tenants?

  Sue McConnachie   |     Sep 02, 2021

Many months after the initial covid shutdowns, courts continue to hear disputes over unpaid rents between commercial landlords and tenants. With stay-at-home orders and so many restrictions on non-essential business activity, many tenants across the country have struggled to meet their lease obligations.  

To protect the economy, most provincial governments have enacted legislation preventing commercial landlords from terminating a commercial lease for non-payment of rent.  The Federal government has passed a series of bills intended to supplement income for commercial tenants.  CERS has recently been extended to at least October 23, 2021, also limiting the landlord’s ability to deal with delinquent tenants.   These protections will not be indefinite and therefore many decisions will have to be made by landlords in the coming months.

As the commercial landlord’s plan for the end of implemented eviction protection, decisions must be made regarding whether lawsuits will be commenced after and during the eviction process. In some cases, it is obvious which tenants will not survive and it is time to prepare for what will need to be done.   As we all know launching a legal action and obtaining a judgment that will not be satisfied is a failure and is costly.  We also know that being aware of the defendants’ assets prior to launching a legal action can be helpful in not only deciding whether to go forward but assist in attaching a judgment to assets.  Due diligence also assists in deciding whether to write off the debt due to lack of probability to satisfy.  Quality Credit Services can help with these decisions and answer some of the following questions with our Asset Accumulation products.  

Skipped & Delinquent Tenant Reports

Does it make sense to incur the costs of legal action – what is the probability of enforcing judgment if obtained?

Are assets available to satisfy a judgment (real property, income, personal property, bank accounts)?

What liabilities does the tenant have – are there other creditors first in line with existing judgments or are there tax liens which receive first priority?

How can this Due Diligence (Asset Reporting) satisfy the landlord’s shareholders and property manager’s clients?

By Sue McConnachie

Quality Credit Reporting is North America’s premiere credit reporting agency, committed to providing unparalleled, high-quality reports and services.

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