How to evict a commercial tenant

If you are a landlord of a commercial property, you may find yourself in the situation where you need to evict a tenant and take back possession of your property. This area of the law can be complicated - the best way to proceed will depend on your specific circumstances and the terms of any lease you have in place. In this article, we look at some of the most common reasons for evicting a commercial tenant and what you can do. 

What is forfeiture in commercial property? 

Forfeiture is the right of a landlord to regain possession of a property where the tenant has breached the terms of the lease. The right of forfeiture must be included in the lease. However, landlords must be careful to establish that a breach has arisen. If a lease is forfeited where the right to forfeit has not been established, the tenant may be able to bring a claim for wrongful forfeiture. 

Has COVID -19 affected forfeiture rights? 

In response to the Covid-19 pandemic, the rules around evicting commercial tenants for non-payment of rent have changed. To protect businesses forced to close during the pandemic, the government imposed a moratorium on commercial landlords evicting tenants who were unable to pay their rent until March 2022. In addition, a new code of conduct came into effect on 9 November 2021 and applies to all commercial leases held by businesses with rent arrears caused by the impact of the pandemic. Landlords are encouraged to come to an agreement with tenants about rent arrears rather than begin eviction proceedings. However, it is important to note that all breaches other than non-payment of rent remain fully actionable by a Landlord notwithstanding the moratorium restrictions.

Regaining possession by forfeiture

If a commercial tenant has breached any of the terms of its lease, you may be able to regain possession of the property by forfeiture. This can often be as simple as changing the locks to the premises, and in the case of unpaid rent a Landlord is not generally required to give any prior notice. However, for any other breach, a Landlord will need to serve the Tenant with a notice under section 146 of the Law of Property Act 1925 allowing a reasonable opportunity for the breach to remedied. However, the Landlords right to forfeit can easily be lost (or “waived) and it is essential that you do not take any action which may jeopardise your position. If you are considering forfeiture please contact us as soon as you become aware that a breach may have occurred.

Summary

Many commercial Landlords and Tenants continue to suffer strained relationships in light of the ongoing difficulties presented by the COVID-19 pandemic. However, with increasingly positive messaging from the Government, Landlords may once again be considering how best to manage, and realise the value of, their assets. Forfeiture – whilst not a step to be taken lightly – can present a useful method for a Landlord to reassert control over their commercial property portfolio.

If you would benefit from advice on your legal rights and options, please get in touch with us.