When a lessee raises a late claim for relief from forfeiture and cannot demonstrate sufficient financial means to satisfy the terms of the lease, can the claim still succeed?

The background

In Timbo v London Borough of Lambeth [2019], a lease reserved service charges as rent which were unpaid by the lessee. The lessee had vacated the property (if it had ever been occupied) in 2010, leaving the property to be managed by a third party individual. A number of judgments were obtained against the lessee for failure to pay service charges. A visit to the property in 2017 revealed tenants to be occupying the flat, although service charges were still unpaid.

The landlord forfeited the lease in or around May 2017, but the lessee’s claim for relief from forfeiture was only issued 14 months later instead of within the statutory time limit of 6 months. Indeed, a possession order had already been granted in the County Court 12 months earlier. The lessee stated in the claim for relief that she had anticipated an amicable resolution being found.

The decision

The High Court found in favour of the local authority landlord. In his judgment, Master Shuman found that the lessee had insufficient funds to be able to meet the arrears and demands made of the local authority, which amounted to £34,522.87 at the time of judgment.

Further, the lessee did not raise an adequate explanation or rationale for bringing the claim out of time. Fault rested with the lessee in all respects, and no order for relief from forfeiture was granted.

Advice and action

It is often felt that the courts will find in favour of a lessee on balance, in the interests of protecting a family home or business. However, this case is positive news for landlords and property managers, finding that where a lessee has clearly breached the terms of the lease, is significantly in arrears, can demonstrate no means of making good the debt and where a claim for relief is brought out of time cannot in the circumstances benefit from relief from forfeiture.

The High Court found in favour of the local authority landlord. Fault rested with the lessee in all respects, and no order for relief from forfeiture was granted.