BUSINESS

Uses of Forfeiture

Forfeiture of Lease may be a good tool if you can’t execute Commercial Rent Arrears Recovery (CRAR) because the Bailiff (Certificated Enforcement Agent) can’t gain entry to the property. It also can be used where there are little or no goods to seize, or the products on the location all belong to 3rd parties.

At present, a landlord can forfeit a tenancy on several grounds depending upon the wording within the lease. the foremost common is none payment of rent. Other reasons include:

Where the tenant breaches the terms of the tenancy.

Insolvency, where the tenant is formed bankrupt, goes into liquidation or there’s an insolvency arrangement like an administration or the appointment of a receiver.

*Improper use of the property.
*Change of use without permission.
*Sub Letting.
*Nuisance behavior or excessive noise.
*The landlord can make a claim for damages for these breaches, but the owner can also wish to regain possession of his property.

The landlord can only take action to forfeit the tenancy if the tenancy contains a “forfeiture clause”.

The forfeiture of lease clause allows the landlord’s Bailiff (Certificated Enforcement Agent) to “re-enter” the premises following a breach.

The forfeiture clause within the lease would normally say something like “if the rent remains unpaid for a period of 21 days then the owner may peaceably re-enter and forfeit the lease”.

Depending upon what the breach is for the owner may or might not need to first serve the acceptable notice under Section 146 of the Law of Property Act 1925.

How to effect Forfeiture of Lease

A landlord can re-enter the premises and forfeit the lease in one of 2 ways. this may be by peaceable re-entry or via court proceedings.

Peaceable Re-Entry

By instructing a Bailiff / Certificated Enforcement Agent like Quality Bailiffs to physically re-enter the premises.

The re-entry must be peaceable. If any violence is threatened or used, the owner and therefore the Bailiff (Certificated Enforcement Agent) may commit a criminal offense. this is often under section 6 of the legal code Act 1977.

How does forfeiture work?

There are two methods of forfeiture hospitable commercial landlords:

peaceable re-entry. this is often where a landlord goes into the property and changes the locks.
Forfeiture by court proceedings. A landlord can issue proceedings for the forfeiture of the lease. The lease will end when those proceedings are served.

Relief from forfeiture

Once a landlord has forfeited a lease, a tenant or a 3rd party with an interest during a lease (e.g. a mortgagee or subtenant) can apply for relief from forfeiture. Relief must be granted by the court. The parties cannot comply with relief without the court’s consent. In granting relief, the court will look to place the owner and tenant back within the position they might are in had there been no forfeiture.

Forfeiture of the lease is during among the foremost important weapons in a landlord’s arsenal for handling rent arrears and other breaches of the lease.

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