If you own commercial premises and have rented to tenants for a fixed term, what do you do if the tenant does not pay their rent and you want to evict them before the fixed term has ended?
You will need to check whether the lease granted contains a ‘forfeiture clause’. Forfeiture enables a landlord to terminate the lease before the end of the fixed term on the basis that the tenant has breached the lease, including where the tenant has failed to pay rent due. The lease must contain a forfeiture clause that allows the landlord to forfeit the lease where the tenant breaches the lease.
If the tenant has vacated the premises, a landlord can physically re-enter the property and bring the lease to an end without the need for court proceedings. If the property remains occupied, the landlord must court proceedings to bring the lease to an end.
Before commencing proceedings, it is a good idea to formally demand the rent from the tenant and advise that if the arrears are not paid in full then proceedings will be started to forfeit the lease. However, any demand for rent must be carefully drafted as the landlord must not do anything to waive their right to forfeit. This means that a landlord should not do anything that unequivocally affirms the existence of the lease, in full knowledge that the tenant has committed a once-and-for-all breach of the lease. This can be done by accepting future payments of rent, but merely accepting rent that is overdue does not waive the right to forfeit.
When drafting a lease, it is a good idea to seek specialist advice to ensure that the lease does contain a forfeiture clause. If your tenant has not paid their rent, you should then seek legal advice so that any demand for rent is carefully worded and for assistance in bringing proceedings to forfeit the lease.