What Happens When A Landlord Seizes Business Assets For Outstanding Rent

2011-07-12

Just to clarify for those reading this blog.....the term "secured assets" means that the business had borrowed money from a lender, typically a bank.  And that the lender took security against those assets.  If the business ever sells those assets, the bank needs to be notified, agree to the sale and has a claim over the proceeds.  Normally, the bank may take possession of the assets themselves. (This would not include inventory being sold in the normal course of business).   In your case, the rent has fallen into arrears and the landlord has seized the assets.  I assume he has also changed the locks.  There would be legal steps that the landlord would have to take in order to sell the assets.  However, the lender still has security over those assets.  The landlord’s seizure does not make the bank’s security invalid.   The bank is going to have to contact the landlord, and vice-versa, to work out arrangements for removal of the assets.    Canada Revenue Agency may also have priority to these assets if they are owed money for payroll remittances and possibly GST.   On your part, you should provide the contact information for these 2 parties to each other, so they can begin to make arrangements.  Make sure the bank knows of the landlord’s seizure so that they can step in.     Donna Carson, CGA, CIRP, Trustee Calgary and Central Alberta regions 1.877.500.0792    [email protected]