Tenant pays current rent but can't pay off old past due balance

[Michael W.]

I recently assumed management duties for a strip mall owned by the family. There is a long term tenant who owes about $10k in back rent, which the former manager allowed to accumulate. Although the tenant is staying current with ongoing rent, she is unable or unwilling to pay off the delinquent balance. If she paid this off, I would have no problem keeping her as a tenant.

What's the best way to handle this situation? Would it make sense to sue her for the back rent without evicting her, or perhaps giving her a 30 day notice (as opposed to a three day notice) to get her act together? I've given her a six month repayment schedule which she agreed to, but has not complied with. She appears to have furniture, fixtures and equipment in the unit which could cover a good deal of the delinquent balance, if sold.

[Chad Hale]

A few questions to consider:

 - How quickly can you fill the vacant space if/when the current tenant is evicted?  Finding commercial tenants can take a lot longer than residential.

 - What is the going $/sqft?  How close/far is this tenant to that?

 - Can they go on a payment plan?

 - Does that tenant's business attract shoppers to the strip mall?

 - Over how many years was that deficit accumulated?

The commercial space has a very different set of rules compared to residential.   What applies/works in one may not be the best course of action in the other.