Property Litigation: Landlords, have you waived your right to forfeit your commercial lease?
LAWSON-WEST SOLICITORS - PROPERTY LITIGATION SERIES
Landlords, have you waived your right to forfeit your commercial lease?
A right to forfeiture is a landlord’s right to retake possession of your commercial property and thereby brings the lease to a premature end. Subject to the wording of the other conditions with the Lease, the right to forfeiture must be expressly reserved in the lease itself.
Once your right to forfeit arises, as landlord, you would need to ensure you do carry out any steps that waives your right to forfeit the lease - a waiver can be either express or implied.
To prevent you losing your right to forfeit the lease, it is imperative that you seek legal advice before contacting your leaseholder or carrying out any steps.
When the right to forfeit occurs, you as landlord would need to exercise the right by complying with strict procedural rules. Depending on what breach has occurred, you may need to serve a notice to your commercial leaseholder under section 146 of the Law and Property Act (“LPA”) 1925. Whether this is a relevant step for you would depend on several factors including the type of breach, and its capability of being remedied.
A section 146 notice under LPA 1925 is served by landlords who wish to commence forfeiture proceedings against its leaseholders following either a single or multiple breaches of a commercial lease. It is extremely important that a correctly drafted and valid Section 146 notice is served as things can easily become time consuming costly if something is wrong – getting it wrong could prevent you as landlord from repossessing your commercial property. There are key requirements to ensure a section 146 notice is valid and the onus is on the landlord to ensure it is correct.
Some breaches require you as landlord to give the leaseholder the option to remedy the breach. If irremediable, then you can commence proceedings in the County Court for forfeiture. Please however note, issuing court proceedings does not guarantee the repossession of your commercial property and the leaseholder has relief available to it, if applied for.
Whether commencing forfeiture proceedings is an option for you or not depends on the circumstances surrounding the breach and further the clauses within the commercial lease. It is therefore important for you to seek independent legal advice before taking matters into your own hands as you run the risk of waiving your right to forfeit and repossess your commercial property.
Associate Solicitor Madhvi Panchal says:
“We often see commercial landlords instructing us after having taken steps to deal with the leaseholders’ breaches themselves or by continuing to demand rent – it is my strong opinion that you should seek legal advice at your earliest opportunity to allow you to consider your options thoroughly before taking any action. The Litigation & Disputes team are well vested in dealing with Commercial Property Litigation and can protect your position robustly.”
If you believe your tenant has breached their commercial lease, get in touch with our Litigation & Disputes team to discuss further.
Contact Us or litigation@lawson-west.co.uk
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