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Clarke & Son Blog​

Unlawful Occupiers – Do Not Waive Your Rights

property

We in the commercial real estate team have come across several situations where tenants have without the landlord’s consent allowed in occupiers of the property. This created difficulties when the landlords later became aware of the unlawful occupations. For both landlords, ensuring a regular payment of rent was important but the breaches of the leases by the tenants could not be ignored. So if you are a landlord who has found yourself in this position, what should you be doing?

The most important step is taking some legal advice as soon as possible to confirm the situation and the rights you have. There is one key thing you can do to preserve your rights under your lease immediately you become aware of the unlawful occupancy. Not easy in today’s economic climate, but stopping demanding and accepting rent can prevent the situation becoming any worse. This is especially important if you would be looking to forfeit the lease for the tenant’s breach.

Assuming the lease contains this right, (most do as standard) forfeiture would entitle you as landlord to go into possession of the property and terminate the tenant’s lease.  Forfeiture can be expensive and difficult to obtain as it would be necessary to obtain a court order and the tenant (and unlawful subtenant if any) may have the right to apply to the court for relief. It can however be a useful threat to a tenant to compel them to take steps to rectify the situation.

You should be aware that the right to forfeit the lease may be denied where the tenant has been paying rent which has been accepted by you with knowledge of the breach. For breaches of assignment and underletting under the lease, not only would the right be lost but you could be considered to have consented to the breach of the lease. In that scenario it may be that you would have to formalise the situation by granting a new lease to a third party you would have preferred not to.

It is always best to take steps to avoid finding yourself in this situation by keeping in touch with the tenant, occasionally visiting or having your agent visit the premises.  If the Tenant is suddenly late paying the rent this may be a sign that they are in financial difficulties and may be wanting out of the premises. Also if the tenant is a company, checking the company’s details at Companies House online on a regular basis can be useful. It can alert you to any late filings of accounts and statements, or if winding proceedings have been commenced against it. You could then take steps to protect your position before the tenant lets anyone into the premises.

With Government energy support coming to an end, there is increasing risk that tenants can be looking to shift their lease liabilities to someone else or sublet and take the rent from a third party, potentially without formal consent. If the worst happens and you find yourself stuck with an unlawful occupier at your property, we can help.

Please contact our commercial real estate Team on 01256 320555 or  by email at mail@clarkeandson.co.uk and we would be happy to assist you.

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