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 protecting your property. Perhaps rent is significantly in arrears, and taking back the property will allow you to re-let it to another tenant. 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.
Exercising the right to forfeiture
The terms of the lease will commonly detail the situations where a right to forfeit may be exercised.
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. There are also the practicalities of regaining possession of the property to consider.
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.
Unlawful forfeiture
If you are a commercial tenant and your landlord has sought to forfeit the lease, we 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.
Applications for relief from forfeiture
If a landlord has validly exercised its right to forfeit, a tenant may be able to make an application for relief from forfeiture. 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.
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 property litigation firm, providing a legal service tailored to the needs of our clients. We believe first-class legal advice should be available to all.
If you need legal support with forfeiture, contact Luscombe Gray for clear and expert advice. Your case will be handled by an experienced property litigation solicitor.
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