| name | default-and-remedies-advisor |
| description | Use when analyzing a monetary or non-monetary tenant default, calculating cure periods, drafting a notice to cure, quantifying damages including acceleration of rent and unamortized TI clawback, or sequencing landlord remedies (notice, re-entry, termination, distress). |
Default and Remedies Advisor
Overview
Lease Default = Tenant's failure to perform obligations under the lease, triggering landlord's remedies.
Purpose of Analysis:
- Determine if default exists
- Calculate cure periods
- Quantify damages
- Recommend enforcement strategy
- Draft default notices
- Protect landlord's rights
Core Concepts
Types of Default
Monetary Default:
- Non-payment of rent
- Non-payment of operating costs
- Non-payment of other charges
Non-Monetary Default:
- Breach of use clause
- Insurance non-compliance
- Unauthorized alterations
- Assignment without consent
- Environmental violations
- Any other covenant breach
Automatic Default (no cure):
- Bankruptcy/insolvency (may be automatic default)
- Abandonment of premises
- Persistent breaches despite multiple cures
Cure Periods
Typical Structure:
- Monetary Default: 5-10 days after notice
- Non-Monetary Default: 15-30 days after notice
- No Cure: Bankruptcy, abandonment (immediate)
Notice Requirement:
- Written notice describing default
- Demand to cure within specified period
- Statement of landlord's intentions if not cured
Landlord Remedies
Termination:
- End lease, regain possession
- Tenant must vacate
- Landlord may re-let premises
Re-Entry:
- Landlord takes possession
- May change locks
- Remove tenant's property (after notice)
Damages:
- Unpaid rent (past and future)
- Acceleration of rent (if lease permits)
- Unamortized TI/leasing costs
- Re-letting costs (commissions, downtime)
- Legal fees
- Interest and penalties
Other Remedies:
- Draw on security deposit
- Call guarantee
- Sue for damages
- Distrain/seize tenant goods (jurisdiction dependent)
Methodology
Step 1: Identify Default
Questions:
- What obligation was breached?
- Is this a monetary or non-monetary default?
- What does lease define as "default"?
- Are there any excluded events (force majeure)?
Review lease for specific default definitions
Step 2: Determine Cure Period
Extract from lease:
- Monetary default cure: ___ days
- Non-monetary default cure: ___ days
- Notice requirements
- Waiver provisions (has landlord waived defaults before?)
Calculate deadline:
Notice Date + Cure Period = Cure Deadline
Step 3: Calculate Damages
Components:
1. Unpaid Rent (past due):
Months Overdue × Monthly Rent = Arrears
2. Accelerated Rent (future, if lease permits):
Remaining Months × Monthly Rent = Future Rent
Discount to NPV if required by jurisdiction
3. Unamortized TI/LC:
Original TI/LC - (Amortization × Months Elapsed) = Unamortized Balance
4. Re-Letting Costs:
Downtime (months) × Monthly Rent = Lost Rent
Leasing Commission (new deal) = LC
TI for New Tenant = TI
Total Damages = Sum of all components
Step 4: Draft Default Notice
Required Elements:
- Header: TO: [Tenant Name and Address]
- Reference: RE: Lease dated [date] for [premises]
- Default Description: Specific breach identified
- Demand to Cure: Tenant must cure within [X] days
- Consequences: If not cured, landlord will [terminate/re-enter/sue]
- Reservation of Rights: Landlord reserves all rights and remedies
- Signature: Landlord's authorized representative
Delivery: Registered mail, courier, personal delivery (per lease)
Step 5: Enforcement Strategy
Options:
1. Negotiate Resolution:
- Payment plan for arrears
- Cure non-monetary default
- Amend lease terms
2. Terminate Lease:
- If significant breach or repeat defaults
- Regain possession, re-let space
- Sue for damages
3. Maintain Lease, Sue for Damages:
- Keep tenant in place (if they cure)
- Sue for past damages
- Monitor future compliance
4. Draw Security/Call Guarantee:
- Apply deposit to arrears
- Demand guarantor payment
- Require replenishment of deposit
Key Calculations
Unamortized TI Calculation
Formula:
Unamortized TI = Original TI - (Original TI ÷ Lease Term × Months Elapsed)
Example:
Original TI: $100,000
Lease Term: 60 months
Months Elapsed: 24 months
Unamortized TI = $100,000 - ($100,000 ÷ 60 × 24) = $100,000 - $40,000 = $60,000
Accelerated Rent (NPV)
Formula:
Future Rent Stream discounted to present value
Example:
Remaining Term: 36 months
Monthly Rent: $10,000
Discount Rate: 8%/year = 0.67%/month
NPV = Σ [$10,000 ÷ (1.0067)^month] for months 1-36
NPV ≈ $328,000 (vs. $360,000 undiscounted)
Total Damages Example
Arrears (3 months): $30,000
Accelerated Rent (NPV, 36 months): $328,000
Unamortized TI: $60,000
Unamortized LC: $15,000
Re-letting costs (est.): $40,000
Legal fees: $10,000
--------------------
Total Damages: $483,000
Red Flags
Notice Defects
Insufficient Cure Period:
- Notice gives 3 days, lease requires 10 days
- Result: Notice invalid, must re-issue
Vague Default Description:
- "You are in breach of lease"
- Result: Not specific enough, tenant may challenge
Wrong Delivery Method:
- Emailed notice, lease requires registered mail
- Result: Notice may be invalid
Premature Termination
Terminating Before Cure Period Expires:
- Locks changed on day 5 of 10-day cure period
- Result: Wrongful termination, tenant may sue landlord
Waiver of Default:
- Landlord accepted late rent for 12 months without objection
- Result: May have waived strict payment deadline
Damages Miscalculation
Claiming Undiscounted Future Rent:
- Jurisdiction requires NPV discount
- Result: Over-claiming, court reduces award
Double-Recovery:
- Claiming both accelerated rent AND re-letting to new tenant
- Result: Unjust enrichment, must mitigate damages
Integration with Slash Commands
This skill is automatically loaded when:
- User mentions: default, cure period, default notice, termination, damages, remedies
- Commands invoked:
/default-analysis, /notice-generator
- Reading files: Default notices, demand letters
Embedded Scripts (primary entry points):
Run the default damage calculator:
cd ${CLAUDE_PLUGIN_ROOT}/skills/default-and-remedies-advisor
python3 scripts/Default_Calculator/default_calculator.py <input.json> [output.json]
Computes gross damages, credits, net damages, and bankruptcy recovery scenarios. If output.json is omitted, results are written to <input>_results.json.
Run the default notice generator:
cd ${CLAUDE_PLUGIN_ROOT}/skills/default-and-remedies-advisor
python3 scripts/Default_Calculator/notice_generator.py <input.json> [output.md] [jurisdiction]
Drafts a formal default notice with damage figures embedded. jurisdiction defaults to Ontario. If output.md is omitted, the notice is timestamped and saved under Reports/.
Sample input JSON files live in scripts/Default_Calculator/default_inputs/.
Related Commands (thin wrappers around the scripts above):
/default-analysis <lease-path> <default-description> - Analyze default, calculate cure periods and damages/notice-generator <notice-type> <lease-path> - Draft formal default notices
Examples
Example 1: Monetary Default - Rent Arrears
Situation: Tenant has not paid rent for 3 months. Lease requires 10-day cure for monetary default.
Analysis:
DEFAULT ANALYSIS
Type: Monetary Default (Non-Payment of Rent)
Default Details:
- Rent Due: $15,000/month
- Months Unpaid: 3 (January, February, March 2025)
- Total Arrears: $45,000
- Late Charges: $1,500 (at 1% per month)
- Total Owing: $46,500
Cure Period: 10 days (per lease Article 15.1)
Action Plan:
1. Draft Notice to Cure
2. Deliver via registered mail + courier
3. Demand payment within 10 days
4. If not cured:
- Terminate lease
- Re-enter premises
- Draw on security deposit ($30,000)
- Sue for balance + damages
Damages if Terminated:
- Arrears: $46,500
- Security deposit applied: -$30,000
- Balance owing: $16,500
- Unamortized TI: $80,000 (24 months remain, $200K original TI, 60-month term)
- Re-letting costs: $35,000 (est. 2 months downtime + $20K commission)
- Legal fees: $8,000 (est.)
TOTAL DAMAGES: $139,500
Recommendation: Issue 10-day notice. If not cured, terminate and sue for damages.
Default Notice (Sample):
DATE: March 25, 2025
TO: ABC Corp., 123 Industrial Blvd., Unit 5
RE: Lease dated January 1, 2020
NOTICE OF DEFAULT AND DEMAND TO CURE
This letter constitutes formal notice that you are in default of your obligations under the above-referenced Lease.
DEFAULT: You have failed to pay Base Rent for the months of January, February, and March 2025, totaling $45,000, plus late charges of $1,500, for a total of $46,500.
DEMAND TO CURE: You must pay the full amount of $46,500 within TEN (10) DAYS of the date of this notice.
CONSEQUENCES: If you fail to cure this default within the cure period, Landlord will exercise its remedies under the Lease, including but not limited to:
- Terminating the Lease
- Re-entering and taking possession of the Premises
- Suing you for all damages, including arrears, unamortized tenant improvement costs, re-letting costs, and legal fees
RESERVATION OF RIGHTS: This notice does not waive any of Landlord's rights or remedies. Landlord reserves all rights under the Lease and at law.
Deliver payment to: [address]
Sincerely,
[Landlord]
Example 2: Non-Monetary Default - Insurance Non-Compliance
Situation: Tenant's insurance expired 60 days ago. Lease requires 30-day cure for non-monetary default.
Analysis:
DEFAULT ANALYSIS
Type: Non-Monetary Default (Insurance Non-Compliance)
Default Details:
- Insurance Expiry: January 1, 2025
- Current Date: March 1, 2025
- Days Lapsed: 60 days
- Lease Requirement: Maintain CGL $5M, Property replacement cost
- Current Status: No coverage (lapsed)
Cure Period: 30 days (per lease Article 15.2)
Action Plan:
1. Draft Notice to Cure (30 days)
2. Demand tenant provide updated certificate within 30 days
3. If not cured:
- Landlord obtains insurance policy
- Charge tenant for premiums
- Potential termination if material breach
Landlord's Insurance Cost (if tenant doesn't cure):
- Estimated annual premium: $12,000
- Chargeable to tenant as Additional Rent
Recommendation: Issue 30-day notice. If not cured, obtain insurance and charge tenant.
Skill Version: 1.0
Last Updated: November 13, 2025
Related Skills: commercial-lease-expert, lease-compliance-auditor, indemnity-expert
Related Commands: /default-analysis, /notice-generator
