Forfeiture For Non-Payment Of Ground Rent

The government is taking steps to help companies in the midst of dealing with landlord-tenant relationships. Starting November 1st, 2012, and running until September 30th, 2013, forfeiture for non-payment of commercial rent arrears recovery in respect of commercial leases covered by the Landlord and Tenant Act 1954 will be suspended.

Although this gives tenants some breathing room they should not make the mistake of thinking this equates to a free ride because it does not! The commercial rent arrears recovery will still be due and up to now, landlords have been able to seek forfeiture for any unpaid rent so starting next year as soon as the suspension has ended on September 30th, 2013, landlords will once again be within their rights to do so.

What Does A Forfeiture Charge Mean?

Unable to threaten forfeiture, a landlord might need the help of bailiffs to collect overdue rent payments. However, there are several issues with this course of action, some of which include the fact that landlords can only collect back fees after occupants have voluntarily vacated the premises. Moreover, another difference was considered in law on 18th June 2020 when it came to commercial collections, as postponement for nonpayment of commercial rent arrears recovery was suspended but debtor recovery for other reasons is still permitted.

Leases typically come with a clause that says the contract will be broken if the property is not operational. If that happens, a landlord can file forfeiture, wherein they illegally break the lease and keep control of the property. However, in the wake of July 4th, most outlets would have been reluctant to risk making any moves against their tenants.

This is because on July 5th, Health Protection Regulations 2020 kicked in and compelled businesses to comply with all protective methods for preventing infection during an outbreak. With that new law looming over them and very few places defying it, it’s quite likely that the court would consider granting tenants relief from forfeiture based on considerations related to public health concerns – which one might vaguely call ‘social distance.’

What is a Commercial Landlord?

As a commercial landlord, there are a number of options available to you if your unruly tenant fails to pay the commercial rent arrears recovery rent. Specifically, the Office of Fair Trading’s Code of Practice for Commercial Tenancies outlines several measures that can be taken.

For example, turnover commercial rent arrears recovery rents are becoming an increasingly popular choice among landlords looking for an easy and straightforward method for allowing their tenants to remain in occupation when they’re having trouble making regular payments (this is also referred to as “taking over paying occupiers”).

If you need further help with this issue, or if you’d like to discuss other options regarding your commercial property with a professional real estate lawyer


Posted in Law