Commercial rent collection in Victoria has tumbled, falling from 88% at the beginning of the year to 70% in May, according to data property management platform Re-Leased.

The industrial sector has been hit particularly hard, as rising petrol prices have taken their toll on companies’ bottom lines. As a result, industrial rent collection declined from 84.3% in April to 69.9% in May.

So what are your options as a landlord when a tenant stops paying rent or breaches the lease in another way?

You must follow the legal procedure

 Tempting as it may be to change the locks and re-take possession of the premises – don’t.

The law is very specific about how a landlord must act, and the tenant could take legal action against you if you don’t follow the rules.

So what should you do instead?

As a general rule, your first step should be to identify the clause of the lease that the tenant breached, before serving them formal notice and giving them at least 14 days to remedy the breach.

While there is no prescribed form for the notice, it should:

  • Be accurate
  • Comply with section 10 of the Landlord and Tenant Act 1936 (LTA)
  • Be served on the tenant in accordance with the requirements of the lease

If it does not, then ​​a subsequent re-entry by a landlord may be deemed invalid and unlawful.

That’s why it’s recommended you consult with an experienced commercial or property lawyer before completing this process.

 Adam Zuchowski is a disputes lawyer and principal at Sutton Laurence King Lawyers.

 Need expert advice on commercial law in Victoria? Contact Sutton Laurence King Lawyers today on 03 9070 9810 or for help