How Can I Recover Possession Of My Commercial Property?

If you are considering evicting your commercial property client, it is essential to seek the expert advice of a commercial property law Solicitor before you take action. It is all too easy to breach the law yourself simply by following the wrong process. Following the correct procedure will ensure that your interests are protected and you can recover possession of your investment in the shortest possible time. In this article, we will explain how you can recover possession of your commercial property.

Can I just physically recover possession of my commercial property?

It may be possible to simply have the locks changed and take possession of your commercial property without applying for a court order. But, it is essential to understand that if you are perceived as using any form of force, you may be guilty of a criminal offence under Section 6 of the Criminal Law Act 1977 (CLA 1977). This may be the case if there is someone at the property who opposes your re-entry or if the person attempting re-entry is aware that someone opposes the re-entry. In fact, you may commit an offence even if the occupier has no entitlement to be in your property. As such, unless you can be absolutely sure that entry can be gained ‘peaceably’, you need a court order to regain possession of your property.

Can I recover possession of my commercial property from the tenant?

The first step in gaining control of your commercial property is to understand your right to possession. You may be able to repossess your building if:

• The commercial property lease agreement has expired – this will only be the case if your tenant does not have a statutory right to a lease renewal under the Landlord and Tenant Act 1954 (LTA 1954). To check if this applies to your lease, have it checked by a commercial property Solicitor.

• There is a ‘break clause’ within the commercial lease agreement, which provides a contractual right for either party to terminate the lease before the expiry date by serving a notice on the other party, or

• You have the right of forfeiture (see more below)

What is the right of forfeiture?

Forfeiture occurs when a landlord retakes possession of a property from their tenant, ending the lease. As a landlord, you have the right to ‘forfeit’ your lease if there has been a breach of covenant or non-payment of rent by the tenant.

There are two ways to exercise forfeiture:

• Peaceable re-entry – here, the landlord peacefully re-enters the premises and changes the locks. Although this is the most cost-effective and fastest method, it is also highly risky. The tenant can apply to the Court for relief from forfeiture and claim compensation for wrongful eviction.

• Making an application to the Court for an eviction order.

Before exercising forfeiture, you must ensure that a Section 146 notice is served on your tenant. This does not apply in all situations; for example, if the forfeiture is for non-payment of rent,

Beware, however; it is remarkably easy for a landlord to inadvertently waive their right to forfeit a commercial lease. Simply reminding a tenant that their rent is overdue could be construed as acknowledging the continuation of the tenancy, meaning the landlord has waived their right to forfeiture.

In addition, landlords considering this option may need to consider whether:

• They will find a new tenant quickly in the current letting market

• The costs for the property if it is vacant for a long period of time outweigh the cost of allowing the tenant to remain

• There any original tenants or guarantors under the lease who would be released on forfeiture of the lease

• There is a guarantor who is liable to take a new lease following forfeiture. If so, would the landlord want the guarantor as its direct tenant? And,

• There may be a risk of squatters taking up occupation in the empty property?

Given the complexity of the law of forfeiture, landlords should seek legal advice before attempting to retake possession.

Final words

By understanding your legal position and the options available to you, you will have the best chance of regaining possession of your commercial property. Speak to a specialist in commercial property law before you take any action. Doing so will protect your investment and legal position, allowing you to carry out your plans as quickly and as cost-effectively as possible.

Pearcelegal has a dedicated team of commercial property law solicitors who provide practical legal advice and support to landlords and tenants across the UK. To make an appointment, please contact us on 0121 270 2700 or enquire through our contact form.