Utilise Security: Call upon any available forms of security, such as a rent deposit or guarantees.Tenant Discussions: Engage in discussions with the tenant to resolve the payment issue amicably.When facing the possibility of lease forfeiture due to non-payment of rent, landlords have several alternatives to consider: On the other hand, forfeiting a lease based on a breach of covenant-essentially obligations outlined within the agreement, typically undertaken by the tenant-requires explicit language in the lease granting the landlord this right in response to covenant breaches. While landlords may opt to decline rent payments to preserve this right, it can be challenging, especially in cases of non-payment, where tenants can seek relief from forfeiture, with clearing arrears being a critical factor.įor landlords facing tenants with cash flow issues, an alternative might be considering a concession arrangement that allows monthly commercial lease payments instead of quarterly ones. Landlords should exercise caution, as accepting rent despite knowledge of a lease breach may be seen as waiving the right to forfeiture clause. The forfeiture process can proceed through peaceful re-entry or by obtaining a court order. However, there's an exception: landlords may have an "implied" right to forfeiture when tenants breach a fundamental contract condition, like failing to pay rent (assuming rent payment is a standard lease requirement). When considering lease forfeiture due to non-payment of rent, it's important to note that this action typically requires explicit provisions within the lease agreement. Non-Payment of Rent and Breach of Covenant Their decision to seek Court relief from forfeiture if necessary.Tenants facing lease forfeiture should determine: However, in a slow market, landlords may face costs and security concerns with vacant properties, making forfeiture less favourable. In a robust rental market, landlords can easily secure new, higher-paying tenants, making forfeiture attractive. If these obligations are breached, the landlord may consider repossessing the property and terminating the lease, with some leases permitting re-entry in specific instances, like tenant insolvency.īefore proceeding with the forfeiture procedure, landlords should assess: Defending an application for relief from forfeiture on behalf of the landlord.Ĭontact Us To Discuss Forfeiture of LeaseĪ lease entails tenant obligations, including payment of rent, maintenance of property condition, and restrictions on assigning or subletting without landlord consent. ![]()
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