How to Recover Rent and Dues From a Commercial Tenant Who Has Left

What you can actually claim once the tenant has gone

A lot more than the rent, usually. That's if the lease was drafted properly and you've kept your evidence. The most common mistake we see is a landlord who claims only the arrears and walks away from everything else. Go through the list. There's the rent unpaid up to the day the tenant really moved out. There's rent for the notice period, if they left without the notice the lease or the law asks for. If the lease has a lock-in clause that holds up, there are damages for the lock-in months still left. Then come the electricity, water, maintenance and common area charges they were meant to pay, along with the cost of fixing whatever damage goes beyond normal wear and tear. And interest, at the rate in the lease or whatever rate the court thinks fair.

On the other side sit the security deposit and any advance rent you're holding. You have to give credit for both. Judges look hard at how a landlord has dealt with the deposit. Leave a three-month deposit out of your claim, or quietly use it up against "damages" you can't prove, and the court starts doubting the rest of your figures as well. It isn't worth it.

We've written this for landlords. Shops, offices, showrooms, warehouses and industrial sheds in Delhi, Noida, Ghaziabad, Gurugram or Faridabad. If you're the tenant chasing your own deposit, our guide on getting a security deposit back from a landlord is the one to read. Eviction, renewal and other lease fights are on the shop and office lease disputes page.

Commercial Court or ordinary civil court?

Two things decide it. How the premises were used, and how much you're claiming. Section 2(1)(c)(vii) of the Commercial Courts Act, 2015 treats agreements about immovable property used exclusively in trade or commerce as commercial disputes. In Ambalal Sarabhai Enterprises v. K.S. Infraspace LLP (2020), the Supreme Court read that as property actually in business use, not property that might be put to business use one day. A shop, office, showroom, warehouse or factory let to a business and run as one falls inside it. A building that's a shop downstairs and a home upstairs is arguable. Your plaint should say plainly what the place was used for.

If it's a commercial dispute and the claim is Rs 3 lakh or more, you're in the Commercial Court. That suits a landlord. The tenant gets a hard deadline for its written statement, and summary judgment is available. Under Rs 3 lakh, or where the premises weren't used only for business, you go to the ordinary civil court of the right value.

Rent control law can send the case somewhere else altogether. In Delhi it mostly doesn't. The Delhi Rent Control Act, 1958 doesn't apply to premises let at more than Rs 3,500 a month (Section 3(c)), and you'd struggle to find a commercial lease in Delhi today below that figure. Rent claims here go to the civil or commercial courts, at Tis Hazari, Saket, Karkardooma and the other district complexes. Noida and Ghaziabad are a different matter. The Uttar Pradesh Regulation of Urban Premises Tenancy Act, 2021 sends many landlord and tenant disputes, arrears of rent included, to the Rent Authority and Rent Tribunal, and Section 38 of that Act keeps civil courts out of matters it covers. The Allahabad High Court has been working out the edges of that bar in recent decisions. Don't assume. Check how it applies to your premises and your tenancy before you pick a forum. In Gurugram and Faridabad, first find out whether the Haryana rent law covers the building at all. The value rules are on our page on which court will hear your case.

Where a landlord's rent claim comes from in law

Registered lease, unregistered lease, or nothing on paper

A registered lease deed is the strongest position you can be in. Every term can be proved straight from it: rent, escalation, lock-in, notice period, who pays maintenance, interest on late rent, and what the premises were let for. And where the deed fixes a monthly rent, a summary suit for the arrears becomes possible, because what's owed is a debt under a written contract. Keep the original safe.

Plenty of commercial lettings in Delhi NCR run on 11-month agreements. Partly that's to avoid registration and stamp duty. An eleven-month agreement doesn't need registering, so you can prove what it says. The trouble starts when the same agreement is renewed again and again, or when the parties sign a three-year or five-year lease and never get it registered. Under Section 49 of the Registration Act, an unregistered lease for more than a year can't be used to prove its terms. The tenancy is then generally treated as month to month. You can still prove the rent from bank entries, receipts and how both sides behaved. But a long lock-in or an escalation clause gets very hard to enforce.

Stamp duty is a separate headache. An unstamped or under-stamped lease won't be admitted in evidence until the deficit duty and penalty under the state stamp law are paid. It's curable. Budget the cost and the delay now, though, instead of discovering it at the hearing. With no written lease at all, you're relying on bank transfers, rent receipts, GST invoices for the rent, WhatsApp messages about payment and the tenant's own conduct. That's enough to prove arrears of an agreed monthly rent. Not much beyond it.

Can you charge for the lock-in months the tenant never stayed?

Often, yes. But it comes as damages, not as rent you're automatically owed. A lock-in clause says that for the first so many months neither side, or the tenant alone, can end the lease. Most also say a tenant who leaves early will pay rent for the rest of the lock-in. Delhi courts have enforced such clauses in registered leases, treating the money as compensation for breach under Sections 73 and 74 of the Contract Act.

There are two catches. You must be able to prove the clause, and where the lock-in runs past a year, that usually means a registered lease. You also must have made a fair attempt to keep your loss down. Say the shop was relet within two months. No court will give you nine months of lock-in rent for that. You'll get the vacant period, any shortfall if the new rent is lower, and what it cost you to find the new tenant.

Advocate B.K. Singh's advice to landlords is to start the mitigation record in the same week the tenant leaves. Hand the premises to two or three brokers, in writing. List it on the property portals. Keep the screenshots and the brokers' emails, and note down every enquiry and every visit. A landlord who can show the court a dated trail of reletting efforts has a much easier time claiming the empty months. "The market was slow" doesn't carry much weight by itself.

The first two weeks after the tenant disappears

First, get the premises back lawfully and record what state they're in. If the tenant gave you the keys, write to it that same day confirming you've got the keys and possession. Don't say anything that sounds like the account is settled. If the tenant has simply vanished and left the place locked, write to it at the premises, at its registered office and on every email ID you have. Say that you treat the tenancy as surrendered, and ask it to hand over possession and remove its goods by a fixed date. Then tell the local police station in writing that you're taking possession of abandoned premises. You want the record to show you did all this in the open.

Shoot a dated video walkthrough with a witness present. Photograph the damage, the fittings and whatever's been left behind. Note the electricity and water meter readings. Get the final utility bills, and a statement of dues from the society or maintenance agency. A year from now, that footage will be worth more than anything you can tell the judge about the condition of the place.

When a landlord calls us to say the tenant has vanished, the first thing we discuss is the stuff left behind. Don't sell it. Don't use it, and don't throw it out either. Indian law gives a landlord no general right to seize and sell a tenant's goods for unpaid rent. Make an inventory with a witness and send it to the tenant with a deadline to collect. If nobody responds, ask the court for directions in the suit, including attachment of the goods under Order XXXVIII Rule 5 of the Code of Civil Procedure (CPC) where there's a real risk they'll be moved. We've seen self-help sales bring theft complaints and counterclaims that end up eating the whole rent claim.

How a rent recovery suit against a commercial tenant runs, step by step

This is the usual route in Delhi NCR when the premises were used for business and what's owed is Rs 3 lakh or more.

1. Work out the account

   Write down every month's rent and charges, the date each fell due, what was paid, and the deposit. Set the deposit off against specific heads, not as one lump. Repair costs need contractor bills and photos behind them. Lock-in damages need your reletting record.

2. Send the legal notice

   Address it to the tenant entity itself (the company, LLP, firm or proprietor), not the brand on the signboard. Send it to every guarantor too. Directors get one only if they personally guaranteed the lease. Attach the statement of account and give a short deadline. Use speed post, courier and email. All three.

3. Go through Section 12A mediation

   Unless you need urgent interim relief, you begin with pre-institution mediation under Section 12A of the Commercial Courts Act, through the District Legal Services Authority of the district where you'll file. If the tenant doesn't turn up, the mediator issues a non-starter report. Some tenants do settle here. They want a clean record for the next landlord.

4. Pick the kind of suit

   Decide whether the whole claim can go as a summary suit or needs an ordinary commercial suit. You can't split one claim into two suits. Get this right. Then value the suit, pay the ad valorem court fee, and verify the plaint with a statement of truth.

5. Ask for interim protection if you need it

   If the tenant company is winding up or shifting assets, apply for attachment before judgment of the goods in the premises, its bank accounts or other specific property. Don't wait for the decree.

6. Summary judgment or trial

   If the tenant files a thin defence, press for summary judgment under Order XIIIA on the arrears nobody seriously disputes. The rest goes to evidence by affidavit, with each witness's statement filed in advance and cross-examination following on the dates the court fixes.

7. Execute the decree

   Go after the tenant's bank accounts, receivables and property. Where there's a guarantee, the guarantor's assets as well.

Summary suit or ordinary suit for the rent?

A summary suit under Order XXXVII CPC lies for a debt or liquidated demand under a written contract. Arrears of a fixed monthly rent under a registered lease fit that very neatly. The tenant then has to apply for leave to defend within a strict time, and if it doesn't, the court can decree your claim. Our summary suit page explains the procedure.

Lock-in damages, repair costs and disputed maintenance are another story. They're unliquidated. The court has to assess them, and they don't fit a summary suit. Watch Order II Rule 2 CPC here. A suit must include the whole of the claim arising from one cause of action, and whatever you leave out, you can't sue for later. File a summary suit for the arrears, keep the lock-in damages back for a second suit, and you may lose the second claim completely.

What Advocate B.K. Singh usually does is file one ordinary commercial suit for everything. He then applies for summary judgment under Order XIIIA on the arrears, which tenants rarely have a genuine answer to, and the lock-in and repair claims go to trial. If there's no lock-in and the premises came back in decent shape, a summary suit for the arrears alone is cleaner. It turns on what you're claiming. Not on habit. Our guide on winning a commercial suit without a full trial explains how summary judgment works.

How long a rent recovery suit takes, and what you'll spend

Papers a landlord should pull together before suing

Guarantors, directors and bounced cheques

Your tenant is the legal entity named in the lease. Nobody else. If that's a private limited company, its directors aren't personally liable for the rent just because they ran the show. Still, a lot of commercial leases in Delhi NCR, especially with startups and new franchises, carry a personal guarantee from a director or promoter. Section 128 of the Contract Act makes a guarantor's liability co-extensive with the tenant's, and you can sue the guarantor in the same suit. Read the lease again for this before deciding whom to sue.

If a franchisee ran the outlet, the brand owner isn't liable unless it signed the lease or a guarantee. Sue whoever actually signed. We've seen landlords sue the well-known brand instead of the small franchisee company that took the shop. It wastes months. It can also land you with a costs order.

Post-dated rent cheques earn their keep when they bounce. A complaint under Section 138 of the Negotiable Instruments Act, 1881 can be filed within its strict time limits, and it runs separately from the civil suit. Our network site on cheque bounce cases sets out the deadlines. The bounced cheque helps the civil claim too, as a written acknowledgment of the debt. Keep the return memos.

How long you have to sue for unpaid rent

Three years. But the clock runs separately for every month. Under Article 52 of the Limitation Act, 1963, time for arrears of rent starts on the date each month's rent fell due. Suppose the tenant stopped paying in April 2023 and you file in June 2026. April and May 2023 are probably time-barred, though the later months are fine. Landlords who let arrears pile up for ages, hoping the tenant will come good, lose their oldest months in exactly this way.

Lock-in damages run from the breach. That's normally the day the tenant left, or stopped paying, in breach of the lock-in. A written acknowledgment signed by the tenant restarts the period under Sections 18 and 19, an email from its accounts team confirming the rent outstanding being a common one. So does a part payment. Our guide on the time limit to recover unpaid dues deals with acknowledgments properly.

Where landlords go wrong once the tenant has left

• Selling or dumping the tenant's things. You've got no right of self-help. Do it and you'll find you're the defendant.
• Sitting on the deposit without explaining it. Show what you set it against, head by head. Judges expect full credit.
• Splitting the claim. Arrears now and lock-in damages later? Order II Rule 2 CPC can cost you the second part.
• Suing the brand rather than the tenant. Look up the exact entity in the lease, its CIN or registration number, and whether anyone guaranteed it.
• Asking for the full lock-in when you never tried to relet. With no mitigation record, expect the court to cut it down.
• Letting arrears run on for years. Each month's rent goes time-barred three years after it was due.
• Forgetting stamp duty. The court won't read an unstamped lease until the deficit duty and penalty have been paid.

When the tenant has shut down or can't be traced

Tenants who leave overnight have often closed the business entirely. Getting your rent back then becomes a matter of finding the people behind it. The tools are the same as for any debtor that's shut shop. Check the company's status on the MCA portal. Find out what other companies its directors run. Look for a guarantor who owns property. Our guide on recovering money from a debtor who has shut his business covers serving a party that has absconded and restoring a struck-off company. And before you spend on court fee, the guide on finding out whether a debtor has assets lists the searches worth running.

If the tenant company is in insolvency, the moratorium stops your suit against it. Your claim goes to the resolution professional instead. A suit against a personal guarantor can usually carry on.

What to get done this week

Take the premises back openly, with everything in writing. Make the dated video and the inventory, read the meters, and get the place listed for reletting. Draw up a month-by-month statement of account with the deposit set off, and check the oldest unpaid month against the three-year limit. Dig out the lease. Is it registered and stamped? Look for a guarantee while you're at it.

Then send a legal notice to the tenant entity and to any guarantor. If it's going to court, our commercial lease disputes page explains how we run these suits in Delhi, Noida, Ghaziabad and Gurugram. If you'd like your lease, statement of account and exit evidence checked before you file, send them to Advocate B.K. Singh's team through the contact page.