Forfeiture of a Commercial Lease

If you have recently discovered that the locks to your commercial premises have been changed without the landlord giving you any notice, then it is likely that your landlord may have forfeited your lease.

Forfeiture means that your landlord is preventing you from accessing the property by changing the locks and the lease has come to an end.

The right of forfeiture should be set out in the terms of the lease before the landlord can exercise it. Most leases contain a standard term that deals with forfeiture, and gives the landlord the power to forfeit the lease on the grounds of outstanding rent being overdue for a certain number of days or if the tenant breaches a covenant in the lease. If any of these conditions is met, then the landlord can legally forfeit the lease.

If the landlord has accepted any rental payments, then he will have invalidated his right to forfeit the lease for that month. The landlord will have to wait until the next rent payment is overdue for the required number of days before he legally forfeit the lease. Where a landlord has incorrectly forfeited the lease, you may be able to apply to the Court to have the forfeiture process put aside, the lease resurrected and given possession of the property. Unfortunately, legal aid is not available in commercial cases such as this, so the legal costs of any court action by the tenant will need to be funded by the tenant. If the tenant wins the claim, he could recover his legal costs from the landlord.

Once a lease has been forfeited, the following points should be noted:

-Â The tenant is only responsible for paying the bills for the period up to the forfeiture date. Third parties will usually require a letter from a solicitor or other authority to confirm this.

-Â The landlord retains the right to recover the outstanding rent, bills, business rates and other outgoings from you for the period before the lease was forfeited.

-Â If the terms of the lease allow, then the landlord may also be able to sue the tenant for the loss of rent until the end of the lease term. The landlord may also be able to recover its expenses in doing so.

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