Forfeiture of a Commercial Lease
What is Forfeiture?
‘Forfeiture of Lease’ is a procedure whereby a Landlord can take back possession of his property without the need of a Court Order.
Once instructed we will peacefully terminate the Lease on any Commercial Property, provided there is a ‘forfeiture clause’ within the Lease and your Tenant has breached the terms of the Lease.
Our Enforcement Agent will attend the premises at a time when no one is present and simply change the locks and display the appropriate notices, thus preventing the Tenant from entering the property thereby forfeiting the Lease.
A Locksmith will be required to attend with the Enforcement Agent to change the locks and ensure the property is left locked and secure.
Our Team will always be happy to discuss your particular circumstances. We are not ‘one size fits all’. Alternatively, you can simply complete an Instruction Form and email or post this directly to us.
email@example.com or telephone 0300 303 3220
Is Forfeiting the Lease Right for Me?
Forfeiting the Lease for Rent Arrears is the most usual reason for wishing to terminate a Lease, however, a Landlord should be mindful that within 3-6 months of the Lease ending the Landlord will become liable for the Business Rates.
If you are considering Forfeiting the Lease because the Tenant is in breach of other terms defined within the Lease, then you will be required to serve the Tenant with a ‘Section 146 Notice’ under the ‘Law of Property Act 1925’. The purpose is to give the Tenant a formal warning and sufficient opportunity to remedy any breach before the Lease is forfeited. We would strongly recommend that you obtain a Proof of Posting rather than Recorded Delivery, as if it has not been signed for, the Tenant can prove that they did not actually receive it.
If the Tenant ignores the ‘Section 146 Notice’ then you can consider Forfeiting the Lease, however in this circumstance it may be prudent to apply through the Courts for a Possession Order together with a Money Order in respect of any rent/service charge outstanding.
Once a Landlord has Forfeited a Lease the Tenant, or sub tenant has the legal right to seek ‘Relief from Forfeiture’ through the Courts, and a Court can re-instate a Lease as if the Forfeiture has not taken place. The Tenant has 6 months from the date of Forfeiture to make an application through the Courts.
Beware of waiving the right to Forfeit!
A Landlord can unwittingly waive their right to Forfeiture by acknowledging the continuation of the Lease by acknowledging a Tenant’s breach of the Lease, such as demanding or receiving rent after the service of a ‘Section 146 Notice’ has expired.
We are here to guide you through the process, including our arsenal of other enforcement options available to a Landlord.
Exercising the right to Forfeit might not be the best option: methods that preclude forfeiture, such as taking legal action through the Courts to enforce the covenants in the lease, or instigating Commercial Rent Arrears Recovery, or the serving of a Statutory Demand in respect of rent arrears are alternatives to consider.
In adverse market conditions, it is sometimes a case of ‘better the devil you know’ than risk an empty property!