Forfeiture of Residential Leases
Leases often contain a clause allowing the landlord to terminate (forfeit) the lease if the tenant defaults upon their obligations. This is a draconian remedy and the law has intervened in a variety of ways to moderate the power of landlords. A landlord may exercise a right to forfeit only where the lease grants an express power to do so.
Having discovered a material breach of the lease a landlord must act to forfeit the lease promptly – or be deemed to have “waived” the right to do so – acceptance of rent by the landlord is likely to be deemed as an act of waiver.
Notwithstanding the wording of the lease – which often speaks of a landlord’s right of re-entry, an attempt to remove a tenant from a residential property is a criminal offence and a tenant in this situation may seek an injunction and compensation – see separate briefing note on this site for more information.
If the landlord wishes to forfeit the lease he will therefore apply to the court for an order authorising forfeiture. During those court proceedings the tenant may ask for “relief from forfeiture”. If a court concludes that the tenant is in breach of the obligations under the lease – the judge will often direct that the tenant remedy the breach (for example pay any arrears of rent or service charge) and the Landlord’s legal costs and that on this basis the lease will not be forfeit.
Before a landlord may bring an action to forfeit a lease he must:-
- In the case of arrears of rent issue a formal demand which must contain prescribed information – for example, the amount of rent due, the period for which this is payable and the name of the landlord and the address for payment.
- In any case other than for arrears of rent – including where the alleged breach is a failure to pay service charges the landlord must serve a “section 146 notice”. The notice must also contain prescribed information including details of the alleged breach of the lease and to give the tenant a “reasonable” time in which to remedy the breach. Only if the tenant fails to do so may the landlord bring an application to the court for forfeiture.
This is a complex area of law and this can be no more than a simplified summary. If you are contemplating taking action as a landlord, or facing possible forfeiture of a lease as a tenant, you should take prompt tailor made advice.