Forfeiture Flashcards
What is forfeiture in the context of a commercial lease?
Right of a landlord to re-enter premises and take them back from the tenant.
Under what conditions can a landlord usually forfeit a lease under a commercial lease?
- T fails to pay rent
- T breaches obligations
- There is an insolvency event
When can a landlord forfeit a lease due to non-payment of rent?
As soon as the lease allows.
What must a landlord do if there is any non-rent related breach of the tenant’s obligations to forfeit?
Serve a section 146 notice.
This details the breach and gives the tenant an opportunity to remedy
What is the advantage of peaceable re-entry for a landlord?
It is cheaper and quicker than applying to court for an order for forfeiture.
What is the risk of peaceable re-entry for a LL?
The tenant can legally challenge it if it is not done lawfully and/or if tenant’s possessions are lost, damaged or stolen
What is meant by waiver of right in the context of forfeiture?
If a landlord acknowledges the continuing existence of the lease with knowledge of the breach, and communicates the act to the tenant, there is a risk of implied waiver.
What happens if a landlord waives their right for a once and for all breach?
They will never be able to regain their right to forfeiture for that breach.
What are examples of once and for all breaches?
- Non-payment of rent
- Unlawful assignment/underletting
- An insolvency event
What are continuous breaches in the context of forfeiture?
Breaches that allow the landlord to regain the right of forfeiture each day the breach continues.
What are examples of continuing breaches?
- Failure to keep premises in repair
- Breach of user covenant
- Failure to insure
What is relief from forfeiture?
When the tenant is entitled to apply for relief after the landlord serves a section 146 notice or starts the process of forfeiture.
How can a tenant obtain relief from forfeiture?
By settling all arrears and the landlord’s costs.
What is the aim of obtaining relief from forfeiture?
To put parties back in the pre-forfeiture position.
