Tenants of commercial properties can become entangled in financial difficulties that lead to breaches of their covenant, most commonly with missed rent deadlines. This leaves landlords in a difficult situation.
Most landlords first resort to a civil dialogue with their tenants to come to an agreement, but sometimes challenging circumstances lead to commercial lease forfeiture being the only remaining option. When would the latter be more effective? And how can landlords achieve a peaceful repossession of their assets?
Forfeiture is a process that enables the landlord to cut a lease short if the tenant is in breach of any contract obligations, including failing to pay rent.
Property owners should always take a cautious approach towards forfeitures; it is seen as a last resort and has several legal implications. Seeking advice from solicitors, bailiffs and enforcement officers is important to ensure a strong legal basis for the action.
You may need to check to see if consent from the court is required before executing the forfeiture. If the landlord manages a commercial property and the tenant is part of the building’s administration, immediate action could lead to trouble.
Termination can take place immediately or after a period of notice, depending on the reason for forfeiture and the request of the landlord. The most common waiting period before carrying out the forfeiture is between 14 and 28 days of non-payment.
Landlords also need to follow a strict statutory notice procedure before terminating leases of tenants in the event of a rental non-payment. Section 146 of the Landlord and Tenant Act 1925 allows tenants the right to receive notice to remedy a breach before the landlord takes action. The notice should contain the details of the breach, a request to correct the breach and a reasonable time to comply. Only when tenants refuse to comply can the landlord act on the forfeiture.
Once the forfeiture of lease is approved, a landlord can re-enter the property in two ways:
Often seen as the most favourable option for landlords, a peaceable re-entry involves entering the leased premises and locking up the property. The tenant voluntarily allows the entry. With this method, further legal complexities are avoided and expenses and documentation are kept to a minimum.
Using a relevant claim form, landlords can issue forfeiture proceedings in front of legal professionals. Although it can be a lengthy process and incur additional fees, this approach prevents difficulties when re-taking possession.
At MS Webb & Co., we have a team of experienced bailiffs and a wealth of expertise in the forfeiture of commercial leases. We take charge of the entire repossession process, working on your behalf to make sure we secure our client’s assets in a peaceful and professional manner. We work in your best interests at all times.
Founded in 1994, MS Webb & Co. is a friendly, professional and family run bailiff company that operates throughout England and Wales. We have worked with a broad range of clients, from private landlords and law firms to major business entities and building societies. We offer our services at competitive prices and tailor them according to your requirements.
If you need assistance with forfeitures or other property related concerns, contact us today.