After forfeiting a lease, CRAR cannot be used to recover rent arrears

 

After forfeiting a lease, CRAR cannot be used to recover rent arrears

Can you forfeit a lease, take back property, and seize tenants goods?

No is the answer to the question. Dependent upon circumstances we can do one or the other, but not both.”

Forfeiture of a lease is the ending of the lease; this occurs when the landlord exercises his right to regain possession against the wishes of the tenant, where the tenant has breached a condition of the lease, or a breach of a covenant. This can be done by a Certificated Enforcement Agent.

This is a good tool if you can not execute CRAR (Commercial Rent Arrears Recovery) because you cannot gain entry, or because there is little or no goods to seize, or because the goods all belong to third parties.

At present, a landlord can forfeit a lease on several grounds. The most common is for rent arrears, or other breaches of the terms of the tenancy, or where the tenant is made bankrupt / goes into liquidation, or there is some other insolvency arrangement such as an administration order or the appointment of a receiver.

Why can’t you CRAR after doing forfeiture?

One of the pre conditions under the Tribunal Courts and Enforcement Act 2007 for the use of CRAR is that there must be a lease evidenced in writing before CRAR can be exercised. Once we have forfeited the lease the lease is determined and the right to use CRAR is lost.

In any case we would normally have used force against the property in order to gain entry for the forfeiture which is not entry by normal means which is required for CRAR.

When can’t you use forfeiture?

Most forfeiture of lease actions are for non-payment of rent. If the landlord has not done anything to waive the breach, then usually the landlord can forfeit the lease without any notice.

It is essential that the landlord must make sure therefore that nothing is said or done to waive their right to forfeit the lease.

A waiver may be construed if the landlord, his bailiffs or agents does anything that acknowledges that the lease is continuing, such as:

  • sending bailiffs in to execute a CRAR procedure
  • agree an instalment plan
  • issue court proceedings

Therefore if CRAR has been attempted it would be likely construed that the landlord had waived their right to forfeit the lease.

If this has occurred then the landlord should wait until the next period of rent is due then forfeit for that month / quarters rent.

We can help

Enforcement Bailiffs Ltd has over twenty five years experience in lease forfeiture and the seizure, removal and sale of goods using CRAR.

Read more information about our lease forfeiture service and commercial rent arrears recovery service.

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0208 090 2439
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