By Gordon Wikle

Problem tenants rarely start with missed rent. More often, it’s late payments, repeated complaints, or failure to follow lease requirements.

Handled early and documented properly, these issues can often be corrected without litigation. Just as important, taking the right steps now puts you in a stronger position if removing the tenant becomes necessary.

This article, the first in a series, outlines practical pre-litigation steps that commercial landlords can take to protect their rights and improve tenant performance. While the focus is on North Carolina law, these principles apply broadly.

Start with the Lease: Know Your Rights

In a commercial landlord-tenant relationship, your rights—and your leverage—come from the lease.

Before taking action, review the key provisions carefully. Many landlords assume they have fewer options than they actually do.

Check the Lease Term and Renewal Status

One of the most overlooked issues is whether the lease term remains in effect.

Start by confirming:

• Has the lease term expired? – Frequently, properties that are not managed by a dedicated third-party manager will continue a tenant occupancy past the term expiration without the landlord recognizing that relief is a simple notice of termination away.
• Did the tenant properly exercise any renewal option? – Where a tenant is in default when attempting to renew or fails to strictly comply with the requirements to exercise a renewal right, the renewal may not be valid.
• Was the tenant in default at the time of an amendment extending the term? – Many amendments require that a tenant represent and warrant that it was not in default at the time of the amendment. Where the tenant’s representation was inaccurate, the amendment may be voidable.

In those cases, the lease may already be month-to-month.

Why this matters:

In North Carolina, a month-to-month commercial tenancy is typically terminable with seven days’ written notice in either party’s discretion. That means the landlord no longer needs to find a reason to remove the tenant, and can skip directly to demanding the tenant surrender the premises. 

Enforce Default Provisions Early

If a tenant is late paying rent or fails to meet any lease obligation, do not rely on informal conversations.

Take these steps:

• Send a written notice of default
• Follow the lease’s notice provisions exactly
• Deliver to the designated notice address
• Track any cure period

Even if the lease includes a “no waiver” clause, repeated acceptance of late payments without notice can create a risk that a court will find a waiver.

Risk Alert:
Accepting late rent without issuing formal default notices may limit your ability to enforce strict compliance later.

This becomes especially important when:

• A guarantee depends on a period without default
• A renewal option requires the tenant to be in good standing

Failing to document defaults can weaken your position in both situations.

Audit Tenant Compliance Beyond Rent

If rent is current but the tenant remains problematic, shift your focus to broader lease compliance.

Commonly overlooked obligations include:

• Providing proof of insurance
• Maintaining the premises
• Delivering required reports or documentation
• Operating under the correct legal entity

These requirements are often ignored in practice, but they matter.

For example, it is not unusual to find that:

• The tenant has changed or dissolved the legal entity named on the lease
• Rent checks come from a different entity than the one on the lease
• Insurance policies do not match the named tenant

Each of these may constitute a lease violation.

Leverage Builder:
Enforcing non-rent obligations creates additional pressure points that can motivate compliance or support future legal action.

Build Leverage Before You Need It

Courts are far more persuaded by a pattern of documented non-compliance than by a single violation.

By consistently enforcing lease terms, you:

• Signal that compliance is expected
• Create a record of defaults and missed obligations
• Strengthen your position if eviction becomes necessary

Even “minor” breaches can become significant if:

• The tenant fails to cure after notice, or
• Multiple issues establish a pattern of disregard for the lease

Common Mistake:
Waiting until a major default occurs before enforcing the lease. By then, you may have lost valuable leverage.

At-a-Glance: What to Do First

If you are dealing with a problem tenant, start here:

• Review the lease term and renewal status
• Send formal notice of any defaults
• Enforce non-rent lease obligations
• Document all tenant non-compliance

Bottom Line

Addressing small issues early, such as late payments, missing documents, and technical lease violations, helps you maintain control of the relationship and strengthens your position if removal becomes necessary.

In Part II, we’ll cover how to amend a lease to keep a problem tenant in line. Part III will address summary ejectment and removal of a problem tenant.

Gordon Wikle is an attorney at Venn Law Group with more than 14 years of experience serving as an assistant district attorney with the State of North Carolina. He focuses on commercial litigation and enjoys analyzing problems and finding creative solutions that are in the best interest of his clients. Navigating difficult situations and resolving business disputes are areas where he excels. Gordon earned his J.D. from Duke University School of Law and has his B.A. in Economics from Vanderbilt University.