A Landlord can forfeit a Non-Housing Act Tenancy, where the rent is over, £100,000 or a “Company Let” agreement for non-payment of rent. This action will bring the tenancy to an end and enable the Landlord to obtain vacant possession of the property.
The tenancy agreement should contain a forfeiture clause which will confirm how many days rent must be outstanding before forfeiture can take place. While the common law requires a formal demand for rent to be made before a Landlord can forfeit a tenancy, the forfeiture clause can dispense with this requirement.
Whilst it is possible for a Landlord to take back possession through peaceful re-entry, Landlords will require a court order if the property is occupied as a residential dwelling and peaceful re-entry will not be possible under the Protection from Eviction Act 1977. In these circumstances, the Landlord will be required to issue forfeiture proceedings through the local County Court to obtain a possession order.
Waiver of the right to forfeit
Where the right to forfeiture has arisen, Landlords must elect to forfeit the tenancy as soon as they are aware of the breach or allow the lease to continue regardless of the breach. A landlord can waive his right to forfeit the lease, if the landlord:
- has knowledge of the breach;
- performs an unequivocal act which recognises the tenancy as continuing to exist; and
- communicates that act to the tenant.
Central Estates (Belgravia) v Woolgar (No. 2) , confirms that once a Landlord has elected, he will be bound by his decision. An act, by words or conduct, which is consistent with the continued existence of the tenancy, cannot be revoked.
Once a Landlord has exercised their right to forfeit the tenancy, both Landlords and agents must be careful not to act in any way which may waive the Landlord’s right to forfeiture. If forfeiture is waived, the Landlord’s claim for possession could be struck out. The demand or acceptance of rent, serving of notice, requesting or attending an inspection of the property, undertaking repairs at the property are all examples of conduct which could amount to the waiver of forfeiture.
If the demand and acceptance of rent has occurred after the Landlord becomes aware of the breach, this would amount to a waiver of forfeiture. It is crucial that any automated rent demands are stopped, and careful consideration is given to all further communication with the tenant. Landlords are permitted to accept the rent which fell due before the right to forfeit arose, however, Landlords and agents should exercise caution. For the avoidance of doubt, Landlords and agents should not demand or accept any further rent from the Tenant without first seeking advice from a solicitor on how to proceed in order to avoid waiving their right to forfeiture.
Published 24 March 2023