Applying for relief from forfeiture? Act without delay

Relief from forfeiture for tenants

A recent high court case shows the importance of acting on time when applying for relief from forfeiture. The basics of the case were as follows:

The tenants (being the Claimants in this matter) had the benefit of a 21-year lease for a property in Leicester (which was entered into in 2008). The Property, which was a ground floor shop with a residential flat above it, attracted a £2,000 quarterly rent instalment. In June 2018 the Claimants had, by way of a mistake, paid 1,500 of the rent thereby going into arrears by £500.

On the 13th of September 2018, the Landlords (the Defendant in this case) exercised their right to forfeit the lease and re-entered the property for non-payment of the rent.

Some 11 days later one of the Tenants contacted the agents acting on behalf of the Landlord, explaining that the £500 worth of arrears had now been cleared and that the upcoming quarterly rent would also be paid on time.

A response did not arrive for some three weeks, in which the agents stated that they received “specific instructions from [the landlords] not to take any action as [the landlords] were dealing with the matter”.

Fast forward to the 25th of  January 2019 at which point Solicitors, who were instructed by the Tenants, again confirmed to the Landlords and the Agents that their client was still open to paying any overdue rent and that their significant delay in issuing a formal Claim for relief from Forfeiture was due to the fact that one of their clients, who resided in India, was not able to provide a signature on the Claim Form. This correspondence was sent via email, however, due to the address being input incorrectly, it was not received by the Agent.

The property was subsequently let out to a new tenant by the Landlord some 10 days after the email from the Tenant. The property was split, with the ground floor shop being let out by way of a three-year lease and the residential property above it being let out on a traditional AST.

The Tenant eventually issued proceedings for Relief from Forfeiture on the 26th of February 2019, this was five months and thirteen days after the Landlords had exercised their right to peaceable re-entry.

The case was heard at Court on January 2020 and, whilst the Judge was critical of the Landlords approach to forfeit a lease with 10 years remaining over a £500 rental arrear, she ultimately decided that the lack of effort and promptness from the Tenants meant that Relief from Forfeiture was not granted, even though the application was just in time!

The case then went to the High Court for an appeal of the decision above. This was successfully appealed but the premises were still under an existing lease with a new tenant. The Tenant was ultimately happy to accept a new lease to start in 2022.

The moral of the story here for tenants is that, should they decide to apply for Relief from Forfeiture, time is of the essence.

Just like in the example above, in circumstances where a lease is forfeited by peaceable re-entry of the landlord the time limit to issue proceedings is six months from said re-entry. However, the tenant should not simply leave the position until the eleventh hour in the belief they will automatically win. Each case is decided upon its own merits and the actions of the tenant are important.

If you would like any more information relating to this article then please feel free to contact me: Telephone – 020 8221 8032, via email: sebastian.jakubowski@bowlinglaw.co.uk or visit my profile.

This is not legal advice; it is intended to provide information of general interest about current legal issues.

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