The case of General Motors UK Ltd v The Manchester Ship Canal Company Ltd concerned a licence agreement which allowed General Motors to discharge surface water into the canal for a modest annual fee of £50.
When your tenant just won't let go...
Forfeiture is a powerful weapon for a landlord. One breach and the tenant can be booted out. But what happens if you kick that commercial tenant out and he comes banging on the door demanding to be let in again? Is he down as well as out?
Inevitably, the answer to that last question is “no”. Tenants have a right to apply to court for what is known as ‘relief from forfeiture’. This is, in simple terms, a right to be given a second chance.
Before you, as a landlord, pull that trigger, it is essential that you stop to consider whether your tenant is likely to make an application for relief from forfeiture. Think ahead. Plan for what you going to do if the court gives your tenant a second chance and, like some unscripted version of Groundhog Day, you are back in a commercial relationship with the tenant you were about to forget.
Relief from forfeiture seems a little unfair on landlords. But is this ‘get out of jail card’ generously handed out to all tenants who need one?
Again, the inevitable “no”. Save in relation to non-payment of rent (where the rules are slightly different) the court has a wide discretion to grant relief. There are no rigid rules. But that being said, you can generally expect the court to grant relief where the tenant remedies whatever breach he has committed or, if the breach cannot be remedied, the tenant pays compensation to the landlord. The court will also generally require the tenant to pay the landlord’s costs.
For many landlords, the question that will arise when contemplating forfeiture is: does my tenant really have the financial resources and the fighting spirit to apply to court for relief from forfeiture? Remember that the tenant will have to fund the application to court and is likely to have to pay your costs at the end of it all. For some tenants at least, the least worst alternative is to move on and start afresh elsewhere.
But whatever your tenant’s situation may be, you must think ahead, avoid assumptions, and plan for more than one outcome. Pulling the trigger with no plan for dealing with the post-forfeiture fall-out can end in a profound, and lingering sense of regret.
For any advice in relation to landlord and tenant issues, please contact Andrew Turner on 01242 586 841 or firstname.lastname@example.org