Commercial leases: the pitfalls of forfeiture

Download document:

Commercial leases: the pitfalls of forfeiture - .PDF file.

Forfeiture is a common and cost-effective method of terminating commercial leases, but is not always the best course of action. Criminal liability, claims for relief from forfeiture and financial loss are possibilities if a lease is forfeited incorrectly or is poorly timed. Here, Shoosmiths shines a cautionary light on the major pitfalls of forfeiture.

Forfeiting or terminating a lease in a weak market may leave the landlord with a vacant property which it is unable to sell or re-let. The result is lost rental income and also acquiring the liability as an occupier for all the financial liabilities for the property, including rates, utilities and maintenance. A property is more likely to fall into disrepair and suffer vandalism if left vacant. Not only can this dramatically reduce the value of a landlord’s investment, if a landlord has additional properties in close proximity, it is likely these will also be devalued by association. In re-taking possession of a property, the landlord also re-takes liability for its physical order. A landlord may be liable for injury and/or damage to third parties, including vandals/trespassers and their property if sufficient safety precautions and preventative measures have not been taken…

If you are registered and logged in to the site, click on the link below to read the rest of the Shoosmiths briefing. If not, please register or sign in with your details below.