Possession and breach of covenant are a commonly litigated area of commercial law. When a tenant takes out a commercial lease on a property, there will be covenants by which he is bound. Claims arising from the possession and breach of covenants are usually the result of breaches by the tenant. Far more rarely is it that the landlord is found to have breached. Oratto has a number of member lawyers who are highly skilled and experienced in this particular area of law.
Common breaches by the tenant
Most commonly, tenants fail to pay the agreed rent at the agreed time. However other disputes can arise through breaches such as sub-letting without permission and failing to carry out repair work as necessary.
What about Landlord breaches of covenant?
If the Landlord has breached a covenant it is likely to be failure to insure or wrongfully refusing permission for alterations or sub-letting. However, this is much less common.
What remedies are available for breach of covenant?
Negotiating your way through an expanse of information about appropriate remedial measures for your dispute can be tricky. This is why we advise contacting Oratto in the first instance. Our member lawyers will have all the expertise necessary to help you in your claim.
If a tenant is found to be in breach, the Landlord has a few options:
- forfeiture - otherwise known as ending the lease. However there must be a clause in place for this to happen; or
- the Landlord can continue with the lease and as an alternative remedy he can instead recover rent arrears, take out an injunction or claim damages; or
- a lesser known remedy is that of distress. This is a more extreme measure where the Landlord will forcibly enter the property and remove the tenant's stock.
Whatever your circumstances, our member commercial law solicitors will be able to advise you specifically. Through Oratto we can put you in contact with just the person you need to speak to.
What happens if forfeiture is used?
Essentially, the tenant will be given a period of time to pay what he owes and if he cannot or does not, then the tenancy ends. The Landlord can do this either by filing the case in the court, or by re-entering the rented premises.
If the issue is rent arrears then the Landlord is entitled to act immediately. Other forms of breaches require the Landlord to serve a section 146 notice on the tenant which specifies which covenant has been breached. This allows the tenant time to remedy the breach.
In a situation such as this, the tenant does have some rights – but these are limited. For example, he can revert to the court for relief of forfeiture to have the lease re-instated, but, other than that, he is largely confined to seeking an injunction or damages through a court claim.
Whatever your possession and breach of covenant issue, Oratto member lawyers will be able to help. Our team of commercial property specialists can be contacted immediately to advise you on how to proceed. So don't face litigation alone – contact Oratto.