Tenants’ breach and forfeiture
Tenants will often inadvertently breach the covenants in their leases. Often this will give a landlord the right to take steps to forfeit the Lease, leaving the tenant without premises unless a court can be persuaded to reinstate the lease.
Not all tenant breaches are the same however. Breaches can be divided into two types –
‘once and for all’ breaches (for example making alterations or displaying signs where these are not permitted by the lease, failing to pay rent, assigning the lease without landlord’s consent) and
‘continuing’ breaches (for example failing to insure the property or keep the property in repair)
For a ‘once and for all’ breach, if a landlord is aware of the breach, but nevertheless acts as though the lease is continuing, the landlord may lose the right to forfeit the lease for good. Demanding and accepting rent can be interpreted as such acts, even where rent is demanded by a landlord’s agent. The landlord would still be able to sue the tenant for damages in certain circumstances, but the tenant would not lose its property.
For a ‘continuing’ breach, no such loss occurs where the landlord acts as though the lease is continuing, and forfeiture can still occur as these breaches are treated as though they re-occur anew every day.
Posted on 13 September, 2022 by Ortolan