Landlords of commercial properties have the right to repossess their property under common law if the tenant breached the terms of their lease, commonly non-payment of rent. Landlords have two options, either forfeit the lease by peaceable re-entry or apply to the court for a writ for possession.
Forfeiture of lease by peaceable re-entry (for non-payment of rent)
The right to forfeit a commercial lease is a type of remedy for landlords. The right to forfeit is a solution for landlords which brings a lease to an end following a tenant’s default of the lease for non-payment of rent.
Forfeiture of lease on this ground is only available if there is an express forfeiture clause in the lease and the conditions are met. For example, the landlords can only forfeit the lease for nonpayment of rent if the lease contains a clause that says the right of forfeiture will be triggered when the tenant falls behind on rent payment. This right cannot be implied.
This right can be exercised in the form of peaceable re-entry. First, the landlord must communicate his unequivocal intention to bring the lease to an end followed by the act of re-entering and securing the premises by changing the locks. This act is commonly enforced by a certified bailiff on the landlord’s behalf. The tenant will know that the lease has been brought to an end from the notices affixed to the premises.
Forfeiture of lease by peaceable re-entry (for breaches other than non-payment of rent)
Before exercising the right to forfeiture for breach of lease clauses (but never for breach of covenant to pay rent), a section 146 (LPA 1925) Notice must be served on the tenant.
The notice served on the tenant by the landlord must:
Once the proper notice has been served the landlord can exercise his right to forfeit the lease by peaceable re-entry or by applying to the court for a possession order.
Applying to the court for a possession order
The guidance in this article should be read in light of the Coronavirus Act 2020, Corporate Insolvency and Governance Act 2020 and associated legislation and procedural measures.
As an alternative to forfeiture of lease by peaceable re-entry, landlords can repossess their commercial property by applying to the court for a possession order. Possession orders can be made in the following situations;
The right of security of tenure allows business tenants to remain in occupation of its rented premises after the end of its lease term. This right is only enjoyed if the lease is a tenancy that is occupied for the purpose of business (s.23(1) Landlord and Tenant Act 1954). If the tenant does ont qualify the landlord has the right to repossess the premises after the expiry date of the lease.
The landlord can make a possession claim against the tenant in the High Court or County Court of England and Wales. A claim form and particulars of claim setting out the facts and grounds of possession should be filed and served properly. The claim will be processed by the courts and a hearing date will be set. At trial the landlord and tenant will argue their respective case and the judge will decide if a possession order should be issued.
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