Key Considerations Before Evicting a Commercial Tenant

As a commercial landlord, there may come a time when your lessee becomes problematic, and evicting your tenant from your property may be necessary. If you are considering evicting a tenant, such as for rent arrears or breach of other lease terms, you will forfeit your commercial lease. This means that through evicting a tenant, you take back possession of your property. This article will explain four key legal issues a commercial landlord must know when evicting a tenant. 

How Does the Tenant Occupy Your Property?

The first key legal issue to consider is how your tenant occupies your commercial property. Whilst you may, for example, have a licence with the occupier, in reality, licences are often commercial leases. Also, sometimes, a landlord and tenant fail to document commercial property, and where the occupier does not have your permission to occupy your property, they are a trespasser. Understanding the type of occupation will guide you in terms of how you evict the occupier.

Do You Have a Protected Lease?

If you are considering evicting a tenant and have a commercial lease, you need to know what type of commercial lease you have. This will determine your grounds for eviction and ultimately take back possession of your commercial property. 

If your lease is a protected lease, there are legal rules about eviction that you need to follow. A protected lease is a lease with security of tenure. This means that the Landlord and Tenant Act 1954 apply to your lease. It follows that legally, the lease automatically renews at the lease end term. To evict the tenant, you must have one of the seven statutory grounds to rely on. Some involve compensation by you to your tenant, and when evicting, you must comply with the statutory notice procedure. 

Can You Forfeit the Lease?

There are two ways to carry conduct the forfeiture process to evict your tenant. One is by peaceable re-entry, and the other is court-order forfeiture. The former is quicker and cheaper, so it is a likely option you may consider. However, a key legal point to note here is that if part of your commercial property is in occupation as a dwelling, peaceable re-entry is illegal. You will have to, therefore, carry out forfeiture by court order.

Both ways to carry out forfeiture of your commercial lease require you to serve notice to the tenant using the correct form. However, with peaceable re-entry, you then change the locks on your commercial property. With forfeiture by court order, you must then apply to a court for a possession charge.

Do You Need to Serve a Section 146 Notice?

A Section 146 notice is necessary when considering evicting a tenant due to a breach of their lease obligations. This could include, for example:

• subletting the property without your permission;
• illegal use of the commercial premises;
• unauthorised alterations to the property; or
• breach of a repair condition.

You must serve a Section 146 notice to all your tenants before you can claim possession of your commercial property. This requires you to explain the breach and how they can remedy it or compensate you. 

Cheat Sheet for Leasing Terms

This cheat sheet outlines what you should be aware of in your lease agreement.

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Key Takeaways

If you decide to evict a tenant, there are key legal issues you need to note. You should ask yourself the following questions:

• How does the tenant occupy your property?
• Do you have a protected lease?
• Can you forfeit the lease?
• Do you need to serve a Section 146 notice?

If you need help understanding your rights when evicting a tenant, our experienced leasing lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 0808 196 8584 or visit our membership page.