Forfeiture for non-payment of rent

• Posted onMay 8, 2017

If a tenant does not pay their rent, a landlord can be left without income from their property and unsure of their rights. One remedy available to a landlord is the ability to re-enter the property and thus terminate the lease. This is known as forfeiture.

In order to be able to forfeit a lease, a landlord will need to establish the basis of their right to do so. The most common way is to rely on a clause in the lease which grants the right to forfeit in certain circumstances, one of which is usually failure to pay rent within a certain period after it becomes due.

Once the right is established, the landlord will then need to consider how it will affect the forfeiture.

One option is by “peaceable re-entry” of the premises, i.e. entering and changing the locks. However, thought should be given to the practicalities of this; particularly if the property is occupied by a tenant who is likely to have people there during the day and/or night, making it difficult to simply change the locks when the building is empty. If an individual is present and/or objects, the landlord risks committing a criminal offence by doing so.  It should also be borne in mind that if there are any goods remaining at the property, the landlord is obliged to ensure their safety to avoid a claim from the tenant for loss due to damaged goods.

The alternative is to issue court proceedings, which avoids the practical difficulties of peaceable re-entry; however it can be a lengthy process resulting in significant legal fees.

Even when the landlord has re-taken possession of the property, the tenant may apply to court for relief from forfeiture which, if successful, results in the reinstatement of the lease and the tenant will be able to remain in the property. Relief is usually granted upon payment of all arrears and the landlord’s costs.

The practicalities of forfeiture, and relief from forfeiture, are far from simple and it is therefore advisable for both landlords and tenants to seek early advice should the possibility of forfeiture arise.

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