Commercial property disputes

what is a forfeiture of a lease?

Lease forfeiture is when a landlord takes legal action to end a lease.

A commercial lease may be forfeited when:

1. A tenant fails to meet their lease obligations, for example, by not paying rent.
2. A situation arises that has been outlined in the lease agreement.

Forfeiture of a lease is a useful right for a commercial landlord, particularly when dealing with a troublesome or difficult tenant.

However, the right to claim forfeiture has potential pitfalls. Landlords should act with caution and seek legal advice before proceeding.

Wrongful forfeiture can result in a tenant claiming against the landlord for losses. They can also claim for an injunction which allows them back into the property. This can lead to significant costs for the landlord.

If you are considering lease forfeiture, you can minimise the risks by consulting with a solicitor. This will ensure you fully understand the legal and financial implications of your actions and follow the correct procedures.

how we can help.

Our commercial forfeiture team can help with the following:

• Reviewing the lease to advise whether a right of forfeiture exists.
• Advising on whether the landlord’s action may have waived that right.
• Drafting and serving a section 146 notice on a tenant.
• Carrying out peaceable re-entry.
• Preparing and managing court proceedings to forfeit the lease on behalf of the landlord.
• Defending landlords against applications for relief from forfeiture.

what is a commercial lease surrender?

A lease surrender is where the landlord and tenant agree to terminate a lease voluntarily before its contractual end date. The tenant gives up their rights to the property and returns possession to the landlord. This causes all future obligations under the lease to end, unless any are specifically preserved.

how does a lease surrender work?

The tenant usually initiates the surrender, often due to financial difficulty. The landlord then considers whether surrender is the best option for them. If agreed, both parties then negotiate the terms; for example, the landlord may keep the deposit and other payments from the tenant.

Deed of surrender: If both parties reach an agreement, they must each sign a formal deed of surrender. The tenant then vacates the property and returns the keys to the landlord. There may be other formalities, such as applying to the Land Registry to cancel and remove the tenant’s leasehold interest.

Informal surrender of lease: This is a less formal approach where surrender happens by conduct. It is rarely the best option, especially for Landlords. For example, surrender by conduct can take place when the tenant indicates that they wish to end the tenancy by returning their keys and removing their possessions. The Landlord then has to show that they have accepted the surrender.

It’s important to note that the act of the tenant returning the keys does not demonstrate the Landlord’s agreement.

alternatives to surrendering a commercial lease.

If a tenant wants to terminate a commercial lease before its expiry date, there are other options. These include:

• Assignment – the tenant finds a new tenant to take over the lease, subject to the landlord’s approval.
• Subletting – the tenant allows a third party to occupy the property under a sublease agreement. This typically needs the landlord’s consent.
• Renegotiating terms – the tenant and landlord renegotiate the lease terms. This could include a shorter lease length, reduced rent or temporary concessions.
• Break clause – Some leases include a break clause. This allows either party to end the lease early, typically on a set dates and with notice.

how we can help.

Our team of specialist property litigation solicitors provide practical advice for landlords and tenants dealing with lease surrender. This includes negotiating, drafting or reviewing a deed of surrender or other options to terminate a lease or find an alternative solution.

what is a dilapidations claim?

A dilapidations claim is where a landlord brings legal action against a tenant for damage or deterioration to a property.

For example, a dilapidation claim may be raised when a tenant fails to comply with the repair obligations under their lease.

The purpose of a claim is to seek compensation for the costs of repairing or restoring the property to its condition at the start of the lease.

There are various types of dilapidations claims. Interim dilapidations claims can be made during the term of a lease, whereas terminal dilapidations can be made by a landlord at the end of a lease.

how we can help.

Our litigation team are experienced in dilapidations claim disputes. We assess each matter and advise on the best course of action, depending on your objectives.

We assist with all types of claims and explore alternative dispute resolution options whenever feasible, to avoid court proceedings.

Our specialist team advise landlords and tenants in a variety of ways, including:

• Checking your lease – reviewing repair, reinstatement, and alterations clauses.
• Strategic advice – practical commercial guidance to help resolve issues quickly and fairly.
• Instructing surveyors – coordinating with surveyors to prepare or respond to dilapidations claims.
• Staying compliant – making sure the process follows the Dilapidations Protocol to reduce risks and avoid mistakes.
• Negotiating outcomes – aiming for cost-effective settlements and avoiding disputes.
• Resolving disputes – representing you in court or through other resolution methods if needed.
• Exit planning – helping tenants reduce liabilities before leaving, or landlords prepare and protect claims.