{"id":179500,"date":"2023-02-08T05:08:46","date_gmt":"2023-02-08T05:08:46","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=179500"},"modified":"2024-05-14T04:36:05","modified_gmt":"2024-05-14T03:36:05","slug":"costs-breach-of-lease","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/commercial-lease-property\/costs-breach-of-lease\/","title":{"rendered":"What Costs Can UK Landlords Recover if a Tenant Breaches the Lease?"},"content":{"rendered":"<p><span style=\"font-weight: 400\">As a landlord in the UK, you have options available to recover costs if your tenant breaches a commercial lease. There are various ways to<\/span> recover<span style=\"font-weight: 400\"> costs for a breach, such as through a Section 146 Notice or forfeiture proceedings through court proceedings. This article will summarise the main costs you can recover from your tenant due to a breach of your lease agreement.\u00a0<\/span><\/p>\n<div class=\"box box--icon box--info\">\n<p><span style=\"font-weight: 400\">Notably, recovering a landlord&#8217;s costs for a breach is an area of significant legal complexity. This article does not cover every issue on the subject of recovering costs. In addition, you should check any current rules that apply or may affect these due to coronavirus laws, such as those for unpaid rent.<\/span><\/p>\n<\/div>\n<h2><span style=\"font-weight: 400\">Tenant Breaches\u00a0\u00a0\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400\">A tenant may breach your <\/span><a href=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/legal-elements-of-commercial-lease\/\"><span style=\"font-weight: 400\">commercial lease<\/span><\/a><span style=\"font-weight: 400\"> in several ways, which tend to be either \u2018continuing breaches\u2019 or \u2018one and for all\u2019 breaches. Some examples of continuing breaches are:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">not having property insurance on the commercial premises;<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">not repairing the property;<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">using the property in a way that has not been agreed upon; and<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">sharing the property with unauthorised people, without permission.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">Examples of once and for all breaches include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">not repairing the property by a specific date;<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">making alterations your tenants should not have done;<\/span><\/li>\n<li style=\"font-weight: 400\"><a href=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/assigning-vs-subletting\/\"><span style=\"font-weight: 400\">assigning the property<\/span><\/a><span style=\"font-weight: 400\"> without permission; and<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">subletting without permission.<\/span><\/li>\n<\/ul>\n<div class=\"box box--icon box--idea\">\n<p><span style=\"font-weight: 400\">If your commercial tenant breaches your commercial lease, it is wise to try to enter into discussions to resolve the breach. You can serve them a Section 146 notice if this does not work.\u00a0<\/span><\/p>\n<\/div>\n<p><span style=\"font-weight: 400\">A Section 146 Notice will prompt your tenants to remedy the breach. They can do so by paying reparations or carrying out their lease obligation. Following this, you can take legal action if our tenant fails to remedy the breach within the time frame. This is known as the right to forfeiture. Once a court has determined forfeiture, you can serve your tenants with notice.<\/span><\/p>\n<h3><span style=\"font-weight: 400\">Rent Breach<\/span><\/h3>\n<p><a href=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/obligations-tenant\/\"><span style=\"font-weight: 400\">Failing to pay rent<\/span><\/a><span style=\"font-weight: 400\"> slightly differs from other kinds of breaches to a commercial lease. You can proceed with forfeiture through the court or peaceable re-entry into your commercial property. You can do the latter as long as they are not on the property at the time and they do not reside in it.<\/span><\/p>\n<h2><span style=\"font-weight: 400\">What Costs Can a Landlord Recover?<\/span><\/h2>\n<p><span style=\"font-weight: 400\">There are specific costs you can recover when a lease dispute arises.<\/span><\/p>\n<h3><span style=\"font-weight: 400\">Forfeiture<\/span><\/h3>\n<p><span style=\"font-weight: 400\">When you serve your tenants with a Section 146 Notice, you may require them to pay reparations for the breach, which is one way to recover costs.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400\">Also, your lease agreement may have a costs recovery clause that details your right to recover costs that arise when you serve the notice. In this circumstance, you may be able to recover these costs. If you take the process of forfeiture through the court for rent arrears, even if the tenant pays these during the process, you can generally recover your costs from them for the application cost.\u00a0\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400\">Commercial Rent Arrears Recovery (CRAR)<\/span><\/h3>\n<p><span style=\"font-weight: 400\">If the breach relates to a failure to pay rent, you may be able to recover your costs through Commercial Rent Arrears Recovery (CRAR). This process is where you take items left in the property to make up for the rent the tenant owes you. Before undergoing this process, ensure that you:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">give your tenant notice that you intend to use CRAR;<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">only sell goods for the sum of rent, VAT and interest;\u00a0<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">only use CRAR if the commercial property is only for commercial purposes;<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">take legal advice about this process.<\/span><\/li>\n<\/ul>\n<h3><span style=\"font-weight: 400\">Debt Proceedings<\/span><\/h3>\n<p><span style=\"font-weight: 400\">In some cases of a breach of lease, getting a <a href=\"https:\/\/legalvision.co.uk\/disputes-litigation\/apply-summary-judgment-commercial-dispute\/\">summary judgement<\/a> on a claim might be an option. This is when:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">it is unlikely your tenant can defend the claim; and\u00a0<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">the claim will likely miss the trial stage.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">If the issue proceeds to court, you may recover a proportion of your costs from your tenant if they lose and are in a position to pay. If it does not, there is no summary judgement. Likewise, the court is likely to order your tenant to pay money to the court as security for you for future rent payments.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400\">Cost Recovery From Other Means<\/span><\/h3>\n<p><span style=\"font-weight: 400\">You may also be able to recover costs where your tenant breaches the lease through other people, such as any guarantors and subtenants. You may also recover rent arrears from any rent deposit your tenants paid. However, many rules surround this option. It is best practice to engage a legal professional before undertaking cost recovery from guarantors or subtenants to ensure you are within your rights.\u00a0<\/span><\/p>\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+448081968584\" class=\"not-prose\">0808 196 8584<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    <\/div>\n\n    \n\n<div class=\"not-prose flex justify-center 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For example, you may apply to the court for a summary judgement through debt proceedings, and your tenant will likely have to pay you a proportion of your costs. They may also have to pay money to the court as security for future rent. Additionally, you may be able to recover costs for the breach by asking your tenant to pay reparations through a Section 146 Notice.<\/span><\/p>\n<p><span style=\"font-weight: 400\">If you need help understanding what costs you can recover if a tenant breaches your commercial lease,<\/span> our experienced\u00a0<a href=\"https:\/\/legalvision.co.uk\/leasing-lawyers-lp\/\"><span style=\"font-weight: 400\">leasing lawyers<\/span><\/a><span style=\"font-weight: 400\"> 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 <a href=\"tel:+448081968584\" class=\"AVANSERnumber dynamic-number\">0808 196 8584<\/a> or visit our <\/span><a href=\"https:\/\/legalvision.co.uk\/membership\"><span style=\"font-weight: 400\">membership page<\/span><\/a><span style=\"font-weight: 400\">.<\/span><\/p>\n<h2><span style=\"font-weight: 400\">Frequently Asked Questions<\/span><\/h2>\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1675832483041\"><strong class=\"schema-faq-question\"><strong>What costs can landlords recover when a tenant breaches the lease?<\/strong><\/strong> <p class=\"schema-faq-answer\">When a tenant breaches your commercial lease agreement, you may be able to recover some costs. For example, if you serve them a Section 146 Notice, they may have to pay reparations for the breach. In addition, if the dispute escalates to court, they may have to cover the costs of your application.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1675832504302\"><strong class=\"schema-faq-question\"><strong>What is Commercial Rent Arrears Recovery (CRAR)?<\/strong><\/strong> <p class=\"schema-faq-answer\">CRAR is a method of recovering costs for the breach of a commercial lease or failure to pay rent. It works by selling the goods your tenant has left in the commercial property.<\/p> <\/div> <\/div>\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"1924c0ad83\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/179500\" \/>            <input value=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/costs-breach-of-lease\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"What Costs Can UK Landlords Recover if a Tenant Breaches the Lease?\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>As a landlord in the UK, you have options available to recover costs if your tenant breaches a commercial lease. There are various ways to recover costs for a breach, such as through a Section 146 Notice or forfeiture proceedings through court proceedings. This article will summarise the main costs you can recover from your<a href=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/costs-breach-of-lease\/\">Continue reading <span class=\"sr-only\">&#8220;What Costs Can UK Landlords Recover if a Tenant Breaches the Lease?&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13326,"featured_media":3257,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"1366,177040,175202,2287,1208,173455","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[30],"tags":[20,21,475,1241,1242,1243],"class_list":["post-179500","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commercial-lease-property","tag-small-business","tag-medium-business","tag-lease-agreement","tag-breach-of-lease","tag-failure-to-pay-rent","tag-section-146-notice"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Costs for Breach of Lease in the UK | LegalVision UK<\/title>\n<meta name=\"description\" content=\"As a landlord in the UK, you have options available to recover costs if your tenant breaches a commercial lease. 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