Landlords: Calling time on your tenant
PUBLISHED: 17:29 26 April 2018
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While many landlords manage to have a good relationship with their tenants, unfortunately all too often there are cases where tenants do not hold up their end of the deal.
In the current economic climate, many tenants have struggled, especially on the high streets, and have not been able to comply with the terms of the lease they signed up to. We have previously covered the situation when tenants become insolvent, but here we take a look at more straightforward tenant failures.
Most leases contain provisions that allow landlords to terminate a tenant’s lease in certain circumstances; these are known as “forfeiture” provisions. It is vitally important that the lease does contain these, as without them a landlord’s power to terminate a lease is very limited.
The most standard forfeiture events are:
• Failure to pay rent.
• Failure to comply with tenant obligations under the lease.
• Insolvency (which we covered last month).
Failure to pay rent is the most common forfeiture event to occur. A standard forfeiture clause would permit the landlord to terminate the lease when rent is more than 21 or 28 days overdue.
This right can be invoked by the landlord via “peaceable re-entry”. This basically means that the landlord physically takes back the property, thereby ending the lease. This is almost always affected by a bailiff on behalf of the landlord.
In terms of a tenant failing to comply with any other lease obligation, this involves a more formal process. Firstly a landlord must serve a notice clearly identifying the breach and give the tenant a reasonable time to remedy the same. If they fail to do so, a landlord may issue court proceedings to terminate the lease. A hearing will be scheduled and a judge will decide the matter.
Unfortunately, from time to time landlords will have issues with their tenants. Our recommendation is to take early advice and be proactive.