The recent case of Sik v Mailk [2025] is a helpful reminder of forfeiture. What is forfeiture? What can you do if your landlord forfeits your lease?
What is forfeiture?
Most leases contain a right for the landlord to ‘forfeit’ a lease if their tenant breaches its obligations. In the context of commercial property, where there is no residential element or mixed use, a landlord whose tenant is in arrears of rent has the right to re-enter the premises and change the locks, to prevent the tenant from re-entering the premises. There are certain conditions within the lease which apply to peaceable re-entry, and to which a landlord must comply. Care must be taken by the landlord to comply, otherwise they are at risk of the tenant bringing a claim for unlawful eviction.
What if my landlord forfeits my lease?
If you are a tenant of commercial property and the landlord forfeits your lease, you should seek legal advice as soon as possible. One option available to a tenant is to apply to the Court for relief from forfeiture. Relief from forfeiture can be granted by a Court which results in the reinstatement of the lease. A Court will only grant relief from forfeiture if the tenant has the money required to pay the arrears of rent and can convince the Court that it can and will comply with conditions the Court imposes.
What else can the Court order beyond payment of the arrears of rent?
Beyond paying the arrears of rent and interest that has accrued on that sum, a tenant who successfully applies for relief from forfeiture should expect to be ordered to pay the landlord’s reasonable professional costs and expenses arising from the forfeiture, including the tenant’s application for relief. Also, the Court has the power to order that the tenant pay to the landlord rent for the period since the lease was forfeited. There will always be a delay between a landlord changing the locks and the Court hearing the tenant’s application for relief. This period could be months.
How much rent is payable for the period in which the tenant has been precluded access to the premises?
The amount of rent payable for this period will be determined by the Court, exercising its discretion on a case-by-case basis.
Case update
In the case of Sik v Mailk [2025], the landlord forfeited the lease on 30 August 2023 because its tenant was in arrears of rent. On 8 September 2023, the tenant sent the landlord an application for relief from forfeiture, but the claim was only issued at Court in February 2024. The Court heard the case on 22 February 2024. The Judge at first instance ordered that relief would be given; that the tenant should pay the rent up to the date of peaceable re-entry plus a sum equivalent to half the rent from that date to 22 February 2024; plus the tenant should pay 50% of the landlord’s legal costs.
The landlord appealed the decision, asserting that the Judge erred by reducing the rent to 50% for the period when the tenant was excluded and for limiting costs to 50% recovery.
Section 139(2) of the County Court Acts 1984 gives authority for a county court to grant relief from forfeiture. The case of Barton Thompson & Co Ltd v Stappling Machines Co [1966] is authority for the court’s wide discretion in determining the period which rent should be paid whilst the property is vacant.
The Judge hearing the Appeal held that the trial Judge was wrong in law and that the relief conditions imposed should have been:
- Payment of the entire rent for the period from the date of re-entry to date of relief;
- Payment of interest on that rent; and
- Payment of the costs of re-entry plus the costs incurred in the forfeiture proceedings.
The Appeal Judge reaffirmed that where the landlord makes no use of the premises between re-entry and the date of relief, the principles of relief conditions set out in Bland v Ingrams Estates LTD (No 2) [2001] applies, and full arrears should be awarded.
Takeaways
- Tenants falling into arrears of rent should beware of the conditions that they will need to overcome to obtain relief from forfeiture, should their lease be forfeited.
- Relief is not guaranteed.
- A tenant’s application for relief must be timely.
- A tenant will need to find the money required to clear the arrears, including the period they are out of occupation, plus costs, to be allowed back into occupation.
If you require legal advice in respect of forfeiture or an application for relief from forfeiture, please contact me, Helen Williams, on 01392 401176 / h.williams@stephens-scown.co.uk