A forfeiture clause is a common clause in a commercial property lease and can allow the landlord to forfeit (i.e. terminate) the lease where the tenant is in breach of their obligations.
A breach relating to a commercial tenancy agreement may include:
- Rent arrears
- Criminal activity on the premises
- Obligations to repair
The rules around forfeiture are complicated and can provide traps for the unwary. It is therefore crucial that legal advice is sought at the outset as both landlords and tenants may inadvertently prejudice their own case.
Depending on the breach (es) alleged, notice of intention to re-enter the premises must be served and sufficient time must be given to allow the tenant to remedy the breach.
Landlords considering whether to forfeit will need to carefully consider the terms of the forfeiture clause, the tenant’s breaches and whether the right to forfeit has been affected by any acts of ‘waiver’ (renouncing the right to claim).
Tenants who face the threat of forfeiture (or have already been excluded from the premises) will want to know whether they can challenge the landlord and/or how they can seek ‘relief from forfeiture’, resume possession and, importantly, minimise disruption to their business operations.
GA Solicitors routinely provides practical advice and strategies for landlords and tenants in all stages of the forfeiture process. With decades of experience you can be assured that your business or investment is in the safest possible hands.