When dealing with commercial property there are many issues that may potentially need to be dealt with.
One of these, unfortunately, could be possession proceedings. This issue could arise for a number of reasons, however it is most commonly related to a lack of payment of rent. Problems can arise at different stages of possession actions against commercial tenants, and so it is wise to seek specialist legal advice to ensure the entire process and any problems that occur along the way are dealt with effectively. Adam’s Solicitors have a wealth of experience in dealing with all commercial property matters so are best placed to offer you and your business advice in relation to possession proceedings.
If a tenant fails to pay rent when it is due, then a landlord may be entitled to terminate the lease and begin possession proceedings. Although the act of beginning possession proceedings or “forfeiting” the lease will not remedy the loss caused by a lack of payment of rent, it will prevent the breach from happening again and allow the landlord to seek out a more reliable tenant, as well as remove what may become a recurring burden – a defaulting tenant. However, if you are a commercial landlord, it is prudent to consider the market conditions before you take the drastic step of forfeiting a lease. You should consider how easy it will be to find a new tenant in the current market climate.
The Landlord and Tenant Act 1954 provides certain statutory protection and safeguards for both landlords and tenants. For example, it provides tenants with security of tenure and protection against unfair lease terms, and for landlords, under section 24(2) of the Act, allows the forfeiture of a lease, i.e. the right to terminate.
How is the right of forfeiture exercised?
Before exercising the statutory right of forfeiture, the landlord must formally demand the amount of rent due, however it is always prudent to check how long the rent is required to be unpaid for before forfeiture can be exercised, there will usually be a clause providing for this in the lease.
Once a formal rent demand has been issued, a landlord can formally begin possession proceedings. The actual right of re-entry is not a statutory right and should therefore always be contained within the lease, which will make it an enforceable contractual right. The landlord can then either use peaceable re-entry to regain possession – or where it is thought that the issue of re-entry may be contentious – issue court proceedings.
Peaceable re-entry is (not surprisingly) the preferred option. In simple terms it involves retaking possession of the property, changing the locks and effectively terminating the lease. Given the time, effort and expense involved in court proceedings, most landlords would prefer that peaceable re-entry was effective and only resort to court proceedings where there is no other option. Peaceable re-entry, however, cannot take place when someone is in the property.
Once the lease has been terminated there is nothing to stop the landlord taking steps to recover the outstanding rental payments.
Can the tenant stop the possession proceedings?
Section 146 of the Law of Property Act gives the tenant the ability to apply to the county court for relief from forfeiture. If the tenant has remedied the situation timeously then the county court may be minded to grant the relief and stop the forfeiture. Relief can apply in either peaceable re-entry or court proceedings.
Contact Adams Solicitors – Commercial Property Possession Proceedings Lawyers in London
All aspects of commercial property can be complex, particularly when it comes to disputes involving possession proceedings. No one dispute is the same and in today’s economic climate it is essential that you are properly advised to allow for a swift and satisfactory outcome. We understand that every commercial property, every investment portfolio and development portfolio are different and there is no one solution to suit all. We can help you ensure that you find the right solution for your business – whether you are a landlord or tenant.
The lawyers at Adam Solicitors are here to help you with all your commercial property and conveyancing needs. We are an experienced and professional team, and we will always focus on your wishes and best interests. To talk through your commercial property matter with our approachable and professional solicitors, contact us on 02077902000 or complete our online enquiry form. We respond to all enquiries the same day they are made, and remain highly proactive until the matter is resolved to our clients’ satisfaction.