When disputes between landlords and tenants seem intractable, a landlord may wish to terminate the lease and regain possession of their commercial property. In certain circumstances, exercising a right to forfeit will allow the landlord to do this.

As a landlord, this is a way of securing a valuable asset – the commercial property which you have leased. Perhaps rent is significantly in arrears, and taking back the property will allow you to re-let it to other tenants. As a tenant, however, forfeiture of your lease could have a catastrophic impact on your business.

Forfeiture is a drastic step and there are numerous legal provisions which aim to prevent the right from being used arbitrarily. One of these is the tenant’s ability to apply to the court for relief from forfeiture.

Luscombe Gray can help your business, whether it is a commercial landlord or a tenant of the property. We can call upon a vast amount of experience in resolving commercial property disputes.

Our firm was founded to provide clear and honest commercial property advice, with a strong commitment to delivering an ethical and effective legal service to each of our clients.

If you would like to discuss how Luscombe Gray can help your business, please do not hesitate to contact us.

Exercising the right to forfeiture

The terms of the lease will commonly detail the situations where a right to forfeit may be exercised. However, landlords also have an implied right to forfeit a lease where a fundamental provision of that lease has been breached.

If you are seeking to forfeit the lease due to tenant insolvency, extra criteria may need to be satisfied.

Successfully exercising a right to forfeit involves strict adherence to statutory procedures. Additionally, when a right to forfeit becomes exercisable, there is always the risk that your conduct may waive the right, even if this is unintentional on your part. For example, communicating with the tenant and accepting or demanding payment, or negotiating a payment plan, may all operate to waive your right to forfeit, as these actions can indicate that the lease is still in operation.

It is therefore critical to seek legal advice as soon as you believe there may be grounds to forfeit the lease. In addition to the risks outlined above, if you take action to forfeit the lease, and you do not have sufficient legal grounds to do so, you could be in breach of the terms of the lease yourself. Luscombe Gray can advise you on your legal position.

There are also the practicalities of regaining possession of the property to consider. We can give you clear guidance on the options available to you and advise you fully on the legal consequences of each.

Applications for relief from forfeiture

If you are a commercial tenant and your landlord has exercised a right to forfeit, Luscombe Gray can advise you on whether they have sufficient grounds to do so, whether they have complied with the correct procedures, and whether any action has been taken by the landlord which would effectively to waive their right to forfeit.

Where the forfeiture can be justified, we may be able to assist you with an application for relief. If successful, this will restore the lease to operation as though forfeiture had never taken place.

The law surrounding relief from forfeiture is complicated. There are many factors which will go into a decision on whether to grant relief. Additionally, the circumstances in which the right to forfeit was exercised will have a bearing on the rights of relief you may have.

For example, where forfeiture has been exercised for rent arrears, and through court proceedings to regain possession of the property, there is an automatic right to relief from forfeiture if the tenant repays all arrears and the costs of the court proceedings. However, this is also dependent on the application being brought within a certain timescale.

Given how complicated and time sensitive the relief provisions are, if your landlord has exercised a right to forfeiture it is vital that you seek specialist legal advice as soon as possible.

Instructing Luscombe Gray

Luscombe Gray is a boutique commercial property litigation firm, providing a legal service tailored to the needs of our clients.

We believe first-class commercial legal support should be available to all organisations. Whatever the size of your business, we are more than willing to provide our services and put our specialist skill and knowledge at your disposal.

Your case will be handled by Chris Luscombe personally, so you can be certain that your business will be able to call upon the expertise of an experienced commercial property litigation solicitor. Throughout his career, Chris has helped a wide range of businesses with their commercial property disputes, from small businesses, to national pub companies, to multi-national telecoms giants.

Luscombe Gray is based in the heart of Yorkshire, in Harrogate, with the reach to assist clients across the country.

If your business needs legal support concerning forfeiture or an application for relief, contact Luscombe Gray for clear, ethical, expert advice.

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