Forfeiture and waiver: the commercial landlord decisions taken in the first 48 hours

The right you can lose by accident

Where a commercial lease contains a forfeiture clause, the landlord can end the lease for a breach. That right is fragile: any act treating the lease as continuing after the landlord knows of the breach can waive it. Sending a rent demand, accepting a payment, or an agent's routine email can be enough.

Because credit control is usually automated, the waiver often happens before anyone in the business has decided what to do.

Stop the automatic acts first

The first practical step is to suspend demands, direct debits and standard chasing correspondence for that unit while the position is assessed, and to tell the managing agent in writing that no payment is to be accepted without instructions.

Continuing breaches, such as disrepair or unauthorised use, are treated differently from once-and-for-all breaches, which is one of the first questions we answer.

Then decide what outcome you actually want

Forfeiture is not always the commercial answer. An occupied unit paying reduced rent may be worth more than an empty one carrying business rates, insurance and security costs, and a tenant is likely to apply for relief from forfeiture and may well obtain it on payment of arrears and costs.

The alternatives — a debt claim, drawing on the rent deposit, pursuing a guarantor or former tenant, commercial rent arrears recovery, or a documented payment plan — should be priced against re-letting prospects for that unit before anyone changes the locks.

If you do forfeit

Peaceable re-entry must be carried out lawfully and, for breaches other than non-payment of rent, will usually require a statutory notice first. Records of the breach, of the decision-making and of the re-entry itself are what defend a later relief application or damages claim.