Content area
Full Text
Tenant default After years of discussion, abolition of forfeiture may finally be about to happen. Paul Barker and Mathew Ditchburn examine the proposals for a new regime that spells the end for peaceable re-entry
Reforming the law of forfeiture has been the subject of debate for decades. As long ago as 1968 and as recently as 2006, the Law Commission has proposed that the current regime should be abolished.
That vision could now be getting closer to becoming reality, making peaceable re-entry a thing of the past.
The Lord Chancellor's March 2015 report on the implementation of the Law Commission's proposals identified their 2006 recommendations as awaiting a government decision, noting that:
"...discussions with some stakeholders have highlighted concerns about the summary termination procedure proposed by the commission. The government is considering how these concerns might be overcome and intends to reach a conclusion as soon as practicable in 2015."
One such stakeholder was the Property Litigation Association (PLA), which last year canvassed the views of its members (who advise both landlords and tenants) in response to a request by the Ministry of Justice.
Forfeiture
In short, forfeiture enables a landlord to terminate a tenancy early on the basis that the tenant has not complied with their obligations in the lease.
Whether a landlord has such a right, and the circumstances in which he will be entitled to forfeit, depend on the wording of the lease. Forfeiture can currently take place either by the landlord issuing and serving possession proceedings or by them taking some other unequivocal action to signal that the tenancy has been brought to an end.
The latter, known as peaceable re-entry, often means changing the locks and is seen by landlords as an effective way of quickly enforcing a tenant's covenants at minimal cost. In either case, the tenancy is brought to an end immediately.
If a tenancy is forfeited, the tenant or the holder of a derivative interest, such as a subtenant or mortgagee, may revive the tenancy by applying to court for relief from forfeiture.
A new landscape
The Law Commission has proposed two forms of statutory termination to replace forfeiture: first, a court-based termination claim (the standard procedure); and, secondly, an accelerated process to replace peaceable...