Commercial Tenancies – Termination or Distraint?

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Depending on the terms of the tenancy agreement, a landlord may be required to provide the tenant with notice that they have defaulted under the lease and that the landlord intends to re-enter the premises unless the breach is rectified within a certain period. If the default under the lease specifically relates to rent arrears, the landlord can also exercise its right of distraint which means a right to seize the tenant’s goods and sell the goods (using the proceeds of sale to pay the arrears). This right to terminate the lease or exercise the right of distraint is mutually exclusive if the tenant’s default relates to non-payment of rent; as such, the landlord can terminate the lease or seize the tenant’s goods, but it can’t do both. Contact us for help if you’re a landlord or tenant.

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