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Home / Update and Advice/ Can a landlord be sure that his entry does not constitute re-entry for the purposes of forfeiture?
Can a landlord be sure that his entry does not constitute re-entry for the purposes of forfeiture?
Written by: San Chima
In the current economic climate, a commercial landlord can expect to be burdened with the twin concerns of delayed rent payments, and a dearth of potential tenants who are able and willing to take on a commercial lease agreement. As such, landlords require a form of short-term relief against spiralling rent arrears which does not have the long-term consequence of terminating a tenant’s obligations under the lease.
In a recent case, a commercial landlord entered a leased premises to seize the tenant’s moveable property for rent arrears. It is a long-established right that a landlord can enter a leased premises to seize the tenant’s moveable property as security for rent arrears. However, in this case the lease contained a clause permitting forfeiture of the lease by re-entry for non-payment of and the tenant asserted forfeiture as a way of escaping further obligations under the lease.
The law states that re-entry must be a positive act which explicitly reflects the landlord’s intention to treat the lease as at an end. Where this act is unambiguous, an intention to forfeit will be presumed; however, where it is ambiguous the actual intention of the landlord must be considered to determine whether the lease has actually been forfeited.
In a simple case of entry and seizure of goods it is unlikely that the tenant will be able to invoke a forfeiture clause in the lease. Even where the landlord seizes all moveable property in the premises, this is still consistent with his right to seek satisfaction of rent arrears. Ambiguity persists where the tenant consequently abandons the premises and the landlord feels compelled to secure it to protect his interest in the property as freeholder and/or landlord, pending the tenant’s return. As such, it will generally be difficult for a tenant to argue his lease has been forfeited unless his landlord has expressly stated this intention.
What lessons can be learnt from this example then? Here are just a few key points:
Ensure your commercial leases are well drafted and clear, particularly where there is a forfeiture clause
If you intend to enter premises to seize goods for non-payment of rent take legal advice in advance of doing so
Use a reputable bailiff – more likely he will follow the letter of the law
If you are a commercial landlord and require any further information on your right to enter and seize goods in respect of rent arrears, please contact San Chima on 020 7790 2000 or [email protected].
