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Relief From Forfeiture.
Understanding What Relief From Forfeiture Is?
Tenants who have a lease on a commercial property and their landlords are attempting to remove them prior to the lease expiry need to use ‘Relief from Forfeiture’ to ensure they may continue their lease and remain occupied in the premises.
Relief from Forfeiture – What is it?
A landlord can attempt to cease your lease and re-enter the property. In order to do this, you will have had to breach the terms of the lease as a tenant. This is a legal process and the right of your landlord to do this will be included in most standard commercial leases.
You though as the tenant, have a right to file a petition at the courts and request Relief from Forfeiture. If granted, this will invalidate your landlord rights to end your lease. The court can exercise and direct to grant or reserve Relief From Forfeiture. If the court considers you have taken all the essential steps to correct the breach then it can be on the side of the tenant. This is a very considered piece of law and requires experienced help.
If your landlord moves to attempt to formally terminate your lease early. You may consider applying for a Relief from Forfeiture order. To proceed once you have decided to defend your position. You MUST apply focus on the very important steps to carry out:
1. Identify if possible the potential breach you have incurred to your lease?
2. Upon forfeiture proceedings commencing, your landlord may apply to the courts or enter your premises by ‘peaceable re-entry’:
Reinstating A Lease
When a tenant or both landlord and tenant wish that the lease continues post forfeiture. The method of reinstating the lease, known as a relief from forfeiture. The tenant applies directly to the Court for relief under section 146 of the Law of Property Act 1925. In the event that this does not happen and the landlord and tenant continue their relationship without a relief order then deemed as a new lease.
If so, the landlords at a disadvantage. The new lease is highly unlikely to have guarantees from the tenant. This then means the new lease may grant the tenant security of tenure. As such, the new lease will have not have been contracted out.
What If A New Tenant Has Been Installed
Once the landlord has claimed Forfeiture and potentially let the property to a new tenant. then the previous tenant still maintains the right to make an application for relief. At this point, the court takes into account such factors as time delay in making application and if the landlord acted hastily and unreasonably in awarding a new lease.
A court ruling in support of the previous tenant will then mean the new tenant takes the place as the previous tenant’s landlord. Therefore the lease between the new tenant and the landlord becomes an intermediate lease and the new tenant then has to make a claim against the landlord for damages.
Relief From Forfeiture – How do I apply?
Section 146 Notice provides particulars of how to apply for a Relief from Forfeiture. Ensure you have professional advice and assistance in filing your claim.
A statutory 6 months time limit exists for application from when your landlord applied for forfeiture.
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