What is meant by rent forfeiture?
Forfeiture occurs when a Landlord exercises their rights under a lease to regain possession of their property where a Tenant is in breach.
In order to exercise this right, you must have the express written right to forfeit contained within your lease. If there is no written lease you are very unlikely to have this right.
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What do I need to do to Forfeit?
The steps you take to forfeit a lease will be determined by the type of breach that has occurred. If you are seeking to forfeit the lease for non-payment of rent then subject to the terms of the lease, you do not need to serve a section 146 notice on the tenant before you intend to forfeit the lease.
Where you are seeking to forfeit a lease for another breach i.e. unlawful assignment, disrepair, unlawful or immoral use, you are required to serve a section 146 notice upon the tenant first giving them a reasonable period of time to rectify the breach. The Law of Property Act 1925 specifies the details which must be included in this notice to make it valid.
How do I Forfeit?
If the Tenant fails to remedy the breach or pay the rent then the Landlord can exercise their right to forfeit the lease by one of following methods;
- Peaceable re-entry
- By Court proceedings
Peaceable re-entry would usually be carried by an experienced bailiff, they will enter the premises at a time when no one is in the premises and change the locks and place notices upon the premises that the Landlord has taken back possession.
Alternatively, court proceedings can be issued to get an order from the court that the tenants’ lease has come to an end.
Waiving your right to forfeit
Whichever method you choose, care must be taken to ensure that you do not waive your right to forfeit. Waiving the right to forfeit is doing or committing any act that expressly or impliedly recognises the continuing existence of the lease. A landlord will be waiving the right to forfeit if they have knowledge of the breach and then recognise the lease as continuing.
Common examples of waiver are:
- demanding or accepting rent
- granting a licence to assign or to sublet
- serving notices under the lease
- arranging an inspection
- seeking an injunction regarding a breach
Whether or not waiver will be fatal to the right to forfeit depends on whether the breach is of a continuing or a once-and-for-all nature.
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