Commercial Lease Advice: Stop Eviction with Relief from Forfeiture

Understanding Relief from Forfeiture

If you’re renting a shop or office space with a tenancy agreement in the UK, and your landlord is looking to end your lease prematurely, ‘Relief from Forfeiture’ might be a handy legal option. 

It’s a way to try and keep your lease and stay in your place. Wondering what Relief from Forfeiture means, what rights you have, what your landlord can do, and what choices you have for the future? Let’s break it down. 


How do you relief from forfeiture? 

If you’ve violated your lease terms as a tenant, like not paying rent or breaking other rules, your landlord can aim to end the lease by taking back the property. It’s a legal procedure, typically stated in standard commercial leases.

As the tenant, you hold the right to ask the courts for Relief from Forfeiture if your landlord moves to terminate your lease. This legal action could override your landlord’s rights. 

It’s up to the court to decide whether to grant Relief From Forfeiture or not. Usually, if the court sees that you’ve made efforts to fix the breach, it tends to support the tenant. Yet, this can be legally intricate. Seeking professional advice about your rights and options in such cases is advisable.


What would be the legal process here?

If your landlord wants to end your lease prematurely and you aim to apply for Relief from Forfeiture to prevent this, certain legal steps must be followed.

1. Initial steps vary based on how you’ve violated your lease terms:

i) If you’ve accrued rent arrears, your landlord can forfeit your lease after a specific number of days from the non-payment date, typically outlined in your lease—often 14 or 21 days. In such cases, your landlord isn’t obligated to provide any prior notice before forfeiting the lease.

ii) If you’ve violated any other covenants of your lease, like subletting without permission or making unauthorised alterations, your landlord must serve you with a Section 146 Notice. This notice should detail the breach, whether it can be fixed, instructions for remedy, and any compensation demands.

2. After initiating forfeiture proceedings, your landlord can either start court proceedings or choose ‘peaceable re-entry’:

i) Court proceedings are initiated if you, as the tenant, haven’t rectified the lease breach outlined in the Section 146 Notice and haven’t compensated accordingly.

ii) Peaceable re-entry is a common provision in many commercial leases. It involves the landlord re-entering the premises while it’s unoccupied, often during the night or early morning. Before re-entry occurs, a noticeable notice must be affixed to the property indicating forfeiture. It’s crucial to note that the landlord cannot forcibly enter the premises, as this could be considered a criminal offence.


Exploring the complete procedures to apply for relief from forfeiture

The Section 146 Notice outlines the procedure for applying for Relief from Forfeiture. Typically, seeking professional advice and assistance is advisable when making your claim

Several factors, if adhered to, may incline the court to view your claim more favourably:

  • If you’ve applied for Relief from Forfeiture within 6 months of the landlord effecting forfeiture, you meet the statutory time limit set by the County Court Act 1984 and the Common Law Procedure Act 1852. However, in certain instances, applications made outside of this timeframe may still be taken into account.
  • If you’ve cleared all outstanding rent arrears and any costs due since court proceedings were initiated.

  • If any other breach has been completely remedied, these actions can bolster your claim for Relief from Forfeiture.
 
 

Forfeit: When Will Your Rights Be Waived? 

Certain circumstances may legally prevent your landlord from forfeiting your lease. These revolve around whether your landlord has undertaken actions or functions that signify their recognition that your lease is ongoing. 

Examples include:

  • Directly contacting you for the collection of overdue rent payments.
  • Receiving rent payments from you.
  • Conducting maintenance or repairs on the property.
  • Corresponding with you regarding lease-related issues.
  • Issuing any form of license as per the lease agreement.


However, it’s crucial to note that if your landlord waives their right to forfeit your lease, this waiver remains effective only until the next breach occurs, such as the next missed rent payment.

 

Read More: 

 

Navigating Compulsory liquidation and lease forfeiture

We can also offer guidance on the complexities of compulsory liquidation and forfeiture. In such cases, if a limited company enters liquidation, the insolvency practitioner can usually apply to the court for Relief from Forfeiture.

If you’re confronted with a forfeiture notice on your commercial tenancy, we suggest seeking specialist advice from a commercial lease expert. The Right to Forfeiture involves intricate legislation, with few statutory rules.

Vanguard Insolvency has been dedicated to assisting company directors facing financial difficulties since 1989. Contact us today to schedule your free same-day meeting at one of our nationwide offices.

David Jackson MD
Senior Partner at Vanguard Insolvency Practitioners | Website

I am an insolvency professional with a distinguished career specialising in commercial insolvency, adeptly navigating Creditors Voluntary Liquidation, Company Voluntary Arrangements, and Company Administrations. With a comprehensive understanding of insolvency laws and an unwavering commitment to ethical practices.