Situation · Owners
My commercial tenant stopped paying rent
Commercial tenancies in BC fall under the lease and the Commercial Tenancy Act, not the Residential Tenancy Branch. Small claims up to $5,000 can go to the Civil Resolution Tribunal. Depending on the lease, a landlord may have remedies such as re-entry or distress, but the rules are strict and fact-specific, so talk to a lawyer before acting.
For: Landlords · Investors
Go deeper
Plain-English definitions with BC sources, from the encyclopedia:
- Leasing out commercial space in BC: a landlord's guide (guide)
- Distress
- Commercial Tenancy Act
- Guarantor
- Deposit
- Term (loan)
General information only. This page is not legal, tax, accounting or financial advice, and it isn’t an opinion on your situation. Laws, rates and figures change, and examples are illustrative. Get advice from a lawyer, accountant or other qualified professional before you act. Reading this page doesn’t create an agency or client relationship. Cam Appleton is a Commercial Real Estate Agent licensed by the BC Financial Services Authority (BCFSA RE611549) with Coldwell Banker Prestige Realty. Terms and disclaimer.
First, read the default clause
Read the lease and speak to a lawyer before any step like changing the locks. Re-entry may end the lease, and sometimes the rent matters more than the space. Note the amounts and dates owed, the default and notice clauses, the security deposit and any guarantor.
Your legal tools, briefly
Re-entry
Taking back the space. The City’s lease guide notes that once a landlord re-enters, the lease has ended and the tenant is locked out. Whether you can still claim arrears or future rent is a question for your lawyer.
Distress
Seizing the tenant’s goods to cover rent, under the Rent Distress Act. The rules are technical, so get legal advice first.
Suing for arrears
Under the Tribunal Small Claims Regulation, the CRT hears small claims up to $5,000. Larger claims go to court.
Bankruptcy
the Commercial Tenancy Act deals with a landlord’s preferred claim for up to 3 months’ arrears if the tenant goes bankrupt.
Compared
| Route | Speed | Cost | Risk |
|---|---|---|---|
| Negotiated exit or payment plan | Fast if both agree | Low | The plan may fail, so put it in writing |
| Re-entry | Fast | Legal fees | May end the lease, ask your lawyer |
| Distress | Fast once started | Legal and bailiff costs | Technical rules, get legal advice |
Working it out
Talk early and put everything in writing. A short signed payment plan is sometimes better for both sides than a dispute. Ask your lawyer whether taking the keys back could be treated as accepting a surrender. See lease surrender.
Questions to work through with your lawyer
- Follow the default clause exactly
- Many leases require written notice and a cure period before a breach becomes a default. If those steps aren’t followed exactly, a landlord can lose the remedy and may owe damages, and picking one remedy can rule out others.
- Pick the remedy that fits the goal
- Common options include ending the lease and re-entering (if the lease allows it, or with a court order), suing for rent while keeping the lease alive, re-letting on the tenant’s account, or distress. If a guarantor matters to you, ask your lawyer before ending the lease, because ending it can affect that claim.
- Distress is powerful and easy to get wrong
- Distress means seizing and selling a tenant’s goods for rent owing. It’s limited by the Commercial Tenancy Act and by the Rent Distress Act, and a wrong step could make the landlord liable.
- Don’t accept a surrender by accident
- Taking the keys, or re-letting without clearly saying it’s on the tenant’s account, may be treated as a surrender, which can end the claim for future rent. Courts have allowed landlords who terminate to claim the lost benefit of the rest of the term in some cases, but notice to the tenant matters, so ask your lawyer.
- Price the vacancy before you fight
- A long fight with a tenant who can’t pay can cost more than a negotiated exit with a new tenant lined up. Running the numbers on downtime, improvements and leasing costs first can help.
- Screen tenants the way a seller screens buyers
- Ask how they’ll pay and what they’ll put up as security. “Money’s no problem” with nothing behind it is a red flag. A personal guarantee or deposit is the leasing version of collateral.
- Unpaid rent can cost you twice
- A building with a defaulting tenant is often worth less to a buyer, because income they can’t trust reads as risk. Resolving it before a sale may protect the price.
- If you’re selling, raise it early
- Raised up front with context, a problem tenant is a discussion. Found in due diligence, it can turn into a price cut or a dead deal.
Every remedy here has legal steps and strict rules in BC, and one wrong step could expose you to damages. See a lawyer before you change locks, seize goods or send a termination notice. If the tenant is insolvent or files for bankruptcy or creditor protection, different rules apply.
Cam is a licensed real estate agent, not a lawyer.
Re-leasing or selling
If the tenant goes, price the space to lease and count the cost of vacancy. If you’d rather not deal with it again, see selling with tenants in place and selling under pressure. More in commercial lease rules in BC.
Common mistakes
- Changing the locks before checking the lease and getting legal advice.
- Accepting partial payments in a way that waives the default.
- Letting arrears build for months before acting.
- Not keeping a written record of every notice and payment.
Accelerated rent and why the wording matters
Many commercial leases let the landlord accelerate the rest of the term’s rent after a default. That means the balance of the lease can show up as one bill, not month by month.
Acceleration is a contract right, not a blank cheque. Courts and lawyers look at how the clause is written, whether the landlord mitigated, and what the Commercial Tenancy Act allows on your facts. Distress (seizing goods for rent) is a separate, technical remedy. Do not try either path from a template you found online.
Read the default and acceleration clauses with your lawyer before you send a hard letter. A clean notice and a documented workout often recover more than a fight that empties the unit.
Questions people ask
Can I change the locks on a commercial tenant in BC?
That depends on your lease and the law, and re-entry may end the lease. This is a question for a lawyer before you act.
What is distress for rent?
Seizing a tenant’s goods to cover unpaid rent under the Rent Distress Act. The rules are strict, so get legal advice before acting.
Can the Civil Resolution Tribunal help?
The CRT hears small claims up to $5,000, per the regulation linked above. Larger claims go to court.
In practice
How I help with a tenant who isn’t paying
This page is for you if you own a commercial property in BC and a tenant has stopped paying rent, or is paying late.
- Happy to help you get clear on your options under the lease, alongside your lawyer.
- We can talk with the tenant for you, because a payment plan or an agreed early exit is often cheaper than a long vacancy.
- If the space comes back to you, I can check what similar spaces nearby rent for, market it, and compare applicants side by side on rent, financial strength and fit.
- Help you negotiate the new lease, while your lawyer handles any formal steps.
What to watch for
- Acting before you've had legal advice. Steps like changing the locks or seizing goods have strict rules.
- Accepting partial payments in a way that could be treated as giving up your rights.
- Guarantors and deposits. Check what security you hold before deciding what to do.
- The cost of an empty unit: lost rent, taxes and the time to find a new tenant.
The steps, in order
- Pull the lease, the payment history and any guarantee.
- Talk to a BC lawyer about your options before taking action.
- Decide whether to work it out, end the lease, or re-let the space.
- Line up re-leasing early so the vacancy is as short as possible.
Good questions to ask
- Is this a short cash-flow problem or a business that's failing?
- What security do I hold: deposit, guarantee, letter of credit?
- What would it cost and how long would it take to re-lease the space?
- Would an agreed early exit be better than a fight?
Lease and property law has BC-specific wrinkles, so for anything legal, check with a BC real estate lawyer before you rely on it. This page is general information, not legal, tax or financial advice. Cam Appleton is a licensed real estate representative with Coldwell Banker Prestige Realty.
Next step
Tenant behind on rent?
Call me before you change the locks. I can help you think through re-leasing, a sale, or a deal with the tenant, alongside your lawyer.
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