Repossession and Forfeiture
Repossession and forfeiture is a remedy landlords can use to gain possession of their commercial property if a tenant has breached a lease covenant.
As it is a draconian remedy, it is imperative that tenants and landlords seek legal advice if the right to forfeiture has been exercised or is being considered.
We are a diverse, multi-lingual law firm that uses best-in-class technology to provide clients with streamlined, modern, and highly effective commercial property law advice and representation. Our years of experience in commercial property law means we have a robust reputation for excellence with the UK’s best UK’s best Barristers and Queen’s Counsel, Estate Agents, Independent Financial Advisers, Surveyors, and Lenders who can bring additional support to our Commercial Property Department if needed.
What is forfeiture?
Forfeiture is an ancient legal remedy that allows a landlord to end a lease and re-enter the property if:
- A covenant contained in the lease agreement has been breached by the tenant, or
- A triggering event set out in the lease has occurred; for example, the tenant becomes insolvent.
The right to forfeiture can be exercised even if the lease agreement is silent on the matter. However, landlords should be extremely cautious. To legally exercise the right of forfeiture, the tenant’s breach of covenant must affect the essence of the contract. The most common reason for forfeiture is due to rent not being paid.
How can a landlord legally re-enter the property?
A landlord can re-enter a commercial property by:
- Peaceable re-entry
- Issuing court proceedings
Peaceable re-entry occurs when a landlord re-enters their commercial property (when the tenant is not there) and bars the tenant from entering (usually by changing the locks). This puts the burden on the tenant to apply to the Court for relief from forfeiture. Peaceable re-entry can only be used when the breach of covenant is non-payment of rent.
Never ever attempt re-entry whilst there is someone in the property or the tenant lives above the shop. Also, peaceable means exactly that; threatening or using force is likely to result in criminal prosecution.
Landlords must also comply with the provisions of the Commercial Rent Arrears Recovery (CRAR) when dealing with left behind stock and possessions.
Issuing Court proceedings
Although issuing Court proceedings is more expensive and ponderous than peaceable re-entry, it carries far less risk. Our commercial property team will almost always advise this route over any other.
What constitutes a waiver of the right to forfeiture?
If a landlord asks for or accepts rent from their tenant, their right to forfeiture will be waived. Any other conduct deemed by the Court to plainly affirm the lease, for example, making repairs requested by the tenant, may also be deemed as a waiver of the right to forfeiture.
What should a tenant who has been served with court proceedings for repossession do?
As soon as a tenant becomes aware of forfeiture proceedings, they can apply to the Court for relief from forfeiture. The Court has the discretion to grant or withhold relief. Factors that will encourage the Court to set aside the forfeiture include the prompt payment of rent owed, remedies to any other breaches of covenant, and offers to pay the landlord’s legal costs.
Why choose us?
Due to the circumstances that lead up to forfeiture, the process can seem stressful and overwhelming for all parties involved. With the right professional advice, it does not have to be. Our Commercial Property Solicitors will carefully examine the commercial lease and advise and represent landlords wishing to exercise forfeiture or tenants desperate to seek relief from the Court.
We are proud of our personal service to all our clients, and where possible, we are always available by phone and will respond to your email within 24 hours. As a full-service law firm, we can also provide advice on other commercial matters such as contracts and dispute resolution.
We will leave no stone unturned when handling your commercial property matters. Each member of our team has the experience and resources available to ensure that every aspect of the forfeiture and repossession process will be spotted, brought to the fore, and managed. Clients trust us to provide commercially-astute advice that fully protects their interests.
Our Solicitors are businesspeople themselves; therefore, we understand that every decision must encompass commercial reality. We receive most of our instructions via word of mouth recommendations because business owners, landlords, and management agencies in the West Midlands know that we have the knowledge and dedication required to advise on the complex process of forfeiture.
We are focused on results and achieving them in the swiftest, most cost-effective manner possible. Our Commercial Property Solicitors will take care of your legal concerns so you can concentrate on your organisation’s future growth and prosperity.
To talk to us about matters concerning repossession and forfeiture, please contact us using the form below.
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Depending upon the complexity we are able to offer fixed fees in some cases. In other cases our solicitors charge the following hourly rate:
- Partner/Member SolicitorHourly rate of £250 + VAT
- Senior Solicitor or Head of Dept: (PQE 8yr+)Hourly rate of £225 + VAT
- Assistant Solicitor/Fee Earner (PQE 3/7yr)Hourly rate of £200 + VAT
- Newly Qualified Fee Earner (PQE 1/3yr)Hourly rate of £170 + VAT
- Paralegals/TraineesHourly rate of £120 + VAT
- Support ParalegalsHourly rate of £100 + VAT