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As a commercial landlord, you will grant a business owner a lease to occupy your property. The lease agreement will detail the lease term, which is how long they can remain in possession of your property. Possession is a type of legal right. Whilst your commercial tenant may have the legal right to occupy your property during the lease term, there will be times when you need to regain possession of your property. This article will explain how you can gain possession.
This cheat sheet outlines what you should be aware of in your lease agreement.
When to Regain Possession
You may need to gain possession of your commercial property either before or when the lease term ends. Some common examples of this are when:
- the commercial lease has expired, and it does not have the legal automatic right to renewal, or where it does, you serve the correct notice on the tenant, but the tenant remains in occupation;
- you wish to forfeit your lease because a lease provision allows this when your tenant is in breach of the lease or is late with the rent; and
- someone is trespassing on your commercial property.
If your tenant does not respond to your letter, there are options to take to gain possession of your commercial property. We explore these below.
Serve a Section 146 Notice
Serving a Section 146 Notice can be suitable where your reason for possession is forfeiture. Forfeiting a lease is a landlord’s right to end the commercial lease early when a tenant breaches the lease agreement. Accordingly, you will evict the tenant to regain access to the property again. Forfeiture can only occur in a commercial lease where the lease agreement gives a landlord this right.
Your Section 146 Notice must state the:
- lease breach; and
- reasonable time the tenant has to repair it.
You can take further action once the specified time lapses and the tenant has not fixed the breach. Either you can peacefully re-enter the property and change the locks or obtain a court order. The lease terminates once the court makes an order for possession.
You will only have possession once you have completed the process of physical possession or possession through the courts. Until then, do not act as though the lease continues or your right to forfeiture is lost. For example, you should not accept rent from your tenant.
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Conduct Physical Possession
One way to gain possession of your commercial property is through physical recovery. This means you enter your property and change the locks.
However, when you use physical possession, you must do so peacefully. Accordingly, you will not be peaceful if:
- a person in the property at the time opposes it; or
- you are aware that a person opposes it.
Physical possession might be a suitable option if you have made many attempts to contact your tenant to no avail. By changing the locks, you can take matters into your own hands and avoid the need to go through the courts. Indeed, court procedures can be costly and lengthy. However, when you conduct physical possession, you must be peaceful. If a commercial tenant is on the property, you risk matters escalating and you using more force than necessary. Consequently, a tenant could press charges for your trespass or for assault if you threaten the use of violence.
Initiate Court Proceedings
You can go through the County Court to gain possession of your commercial property. The first step is completing a CPR 55 procedure. Although you can send this to any County Court, sending it to the one that deals with your commercial property address is quicker. Your form has to be in the right hearing centre to set a hearing date for your case. If you win your hearing, a court will issue you a possession order.
It is possible to gain possession through the High Court where there are exceptional circumstances. These include:
- complicated points of law that relate to your case; and
- complex and confusing disputes of the facts in the case.
When you wish to gain possession through forfeiture due to your tenant’s failure to pay the rent, you might be able to start your possession claim online. This depends on whether the court has the ability.
Key Takeaways
Different circumstances can influence the need to regain possession of your property. The first step should always be to communicate with your tenant. Inform them of your intention to regain possession. Importantly, always follow your lease provisions on how to terminate your lease early. If your tenant is unresponsive to your communication, you might service a Section 146 Notice, conduct physical possession, or initiate court proceedings.
If you need help understanding how to gain possession of your commercial property, 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. Call us today on 0808 196 8584 or visit our membership page.
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