COMMERCIAL LEASE FORFEITURE

Forfeiture is a landlord’s right to determine a lease when the tenant is in breach of the terms or when certain events happen as set out in the lease – e.g. the tenant has not paid rent or the tenant becomes insolvent

The lease must expressly give the landlord the right to forfeit. 

There are some circumstances in which a right to forfeit can be implied into the lease, but in most leases there will be a specific clause. 

This clause will  give the landlord the right to forfeit once the tenant has been in breach for a period of time – typically 14 days

It may only be used on commercial premises and there must be a written lease in place. (If the premises are mixed use or residential use, you will need to obtain a judgment to recover arrears)

CRAR may only be used to recover rent, interest and VAT. ( If you need to recover other charges such as insurance or service charges, we can help separately).

The rent must be at least seven days in arrears and the rent owed must be for the value of at least 7 days’ rent.

The Enforcement Agent (Bailiff) must give the tenant at least 7 days’ notice (excluding Sundays and bank holidays) that he is exercising his right to use CRAR. 

The rent must still be unpaid at the time the notice is served, as well as immediately before any goods are seized.

The notice must be served, either by post, hand, fax and electronic communications such as email. Notice will be valid for 12 months. 

Where the right to forfeit has arisen,you must be careful not to do anything to waive that right. 

Waiver occurs when the landlord:

Knows of a breach in the lease

Does something that recognises that the lease continues to exist

Communicates that act to the tenant.

Effectively, you must decide: 

do you forfeit as soon as you're aware  of the breach, or do you treat the lease as continuing and therefore waive the right to forfeit? 

For example, a landlord cannot say that a lease has come to an end, if he does something that could only be done if the lease continued to exist. For example, demand or accept rent.

Previous regulations (Distress for Rent) provided the element of surprise. With no prior notice, the bailiff could turn up and seize your tenants goods. 

By contrast, under the new regulations of CRAR, we must give the tenant at least 7 clear days notice in writing.

We send the letter out on the day we take instruction from you.

If the breach is non payment of rent then usually no. 

The common law remedy for landlord right of forfeiture is a very quick and effective solution without the need of making an application to a court.

On completion of our online Forfeiture instruction,  we will promptly and peaceably enter the premises, change the locks and display the correct notices of forfeiture and torts if applicable

Under torts (interference with goods) Act 1977 we are obliged to give notice to the tenant (usually 14 days) in which he can collect his goods at a time convenient to you.

Alternatively, we can arrange for an Agent to attend to supervise the access.

It is a criminal offence for the tenant to break into your property. The Police can take criminal action against them.

If you are concerned, we can arrange extra security measures to be put into place. Just phone us for details.

Our rates start from £235 which includes drafting of legal notice and torts.

Please call us on 0330 133 1818 to find out more