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What if your commercial tenant abandons their unit?

On Behalf of | Feb 25, 2023 | Commercial Leases

Securing a commercial tenant usually means that a property owner can count on a year or more of regular payments. Commercial leases frequently run for several years and therefore help guarantee a steady stream of income for some time. 

Unfortunately, businesses often fail. Especially if your tenant is a startup business, it might reach a point wherein it is insolvent and has no means of continuing to operate. Most business owners will communicate with their creditors, including their landlords, and do their best to fulfill their obligations. 

However, some people will try to cut and run. You might drive by and realize that the space is unoccupied, or you could hear from utility companies or neighboring business owners about the sudden vacancy. 

You can terminate the lease eventually

The law factors in the possibility of miscommunication or other issues by creating a waiting period before a landlord can take action over an abandoned rental property. California law gives a tenant several days after a rent default occurs under the terms of a commercial lease before they can be served with a Notice of Belief of Abandonment. 

If they fail to do so, at that point, the landlord can potentially treat the property as though the tenant abandoned it after another 15 days, after which they can terminate the lease with finality.  

Complicated commercial property situations require guidance

The wrong move when trying to regain possession of a commercial property could negatively affect your rights as the property owner and landlord. There could be financial risks involved and a tenant could even choose to file a lawsuit against you, especially if they leave behind furniture or equipment and you take possession of those items or sell them.

Mistakes when handling a default related to rented property can end up being very expensive for a landlord. Talking about your situation and getting professional advice can help you avoid mistakes when dealing with an issue related to your commercial lease.