Relief from forfeiture

[yeahbutno]

Currently in a situation where we are looking to terminate the lease of a tenant who has been causing some problems.

The legal advice we have taken is that we have good grounds to declare the lease forfeited, and we have a new tenant lined up to move in straight away. It is our intention to do so.

Obviously, it is possible that the current tenant takes legal action to claim relief from forfeiture, and although it is unlikely, I feel we ought to know where we might stand if he does , and if he were successful.

1) As there would be a new tenant and lease in place, would the court order the new tenant out in order to put the old one back, or would they just award compensation to the old tenant?

2) If it's the latter, how would they calculate the amount of compensation?

TIA

[Tax Accountant]

I believe that you should issue notice of intention to forfeit the lease and follow this up with a court order for forfeiture. This way there is no comeback from the tenants.

To do otherwise, you may face a claim for loss of profits etc from the existing tenants.

Ramnik

[yeahbutno]

Thanks Karongo.

The circs are quite complicated, and I won't bore you with the details. However, we feel it would be far preferable to gain re-entry, and effectively present him with a fait-a-complis, and then have the legal fight (if there needs to be one) afterwards.

Basically, what I'm trying to establish is whether the court could under those circs evict the new tenant and re-instate the old one in the (hopefully highly unlikely) event of him gaining relief from forfeiture, or alternatively what the likely damages would be financially.

[Tax Accountant]

I think that you would be taking a hugh risk if you gain forcible re-entry to repossess your premises and in the process also sell the tenant's machinery etc.

I don't think that the court will force you to reinstate the existing tenant, but if they do so, you will then have a problem with the new tanant.

Either way, at the very least, you will be forced to compensate one or the other tenant for loss of business and profits etc.

I would not advice you to do so unless you have been adviced very clearly that it is safe to do so.

I have a tenant who has stopped paying rent as well since April 2005 and I am now proceeding through the court to repossess the premises. My situation is complicated because my joint freeholder is also the sole owner of the tenant company.

Ramnik

[Paul_f]

If you go to court to obtain forfeiture of the lease (which you should) the judge will usually give the tenant an opportunity to remedy any breaches within a set timescale. You don't say what the breaches are, which would be very useful to know.