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As a tenant with a commercial lease, circumstances can arise where your landlord has a right to gain possession of their property. For example, they can seek to possess their property after properly terminating the tenancy. Your landlord will also have a right to repossess the property if you do not pay rent or breach lease provisions. They can do this by forfeiture of the lease. If your commercial landlord seeks possession through the court, it is essential that you respond appropriately and within the specified timeframe. This article will explain how a commercial tenant should react to a formal claim from a court for possession of commercial property.
What is Possession?
Your landlord has a legal right to gain possession of their commercial property if the tenancy has been terminated correctly. This means they take back control of the property and the right to occupy it. This could occur if:
- the contractual term of the lease agreement expires (as long as it is not a protected lease);
- the contractual term of the lease agreement expires where it is a protected lease, but you do not qualify for the automatic right for renewal; or
- a landlord or tenant issues a section 25 or section 26 notice for a protected lease, but the time limit has expired to make any court application to decide new tenancy terms.
When your landlord wants to gain possession of their commercial property, they may do so through physical recovery. This is where they change the locks and take possession of their property. However, it is more likely that your landlord will obtain a court order for possession.
Process of Possession
If your landlord seeks possession through the county court, there are certain rules and steps to follow. A court hearing for possessing the premises should occur at the nearest country court to the commercial property. In exceptional circumstances, the claim for possession could go through the High Court, which is when there are:
- tricky dispute of facts; or
- tough points of law.
Where your landlord claims on paper, they should pass you an N5 form:
- personally;
- by first-class post; or
- through delivering these to the last address your landlord knew you were at.
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Your Response
When you receive a claim from your landlord to seek possession through a court, you have a legal obligation to acknowledge it. However, it is essential that you serve a defence within 14 days of the date you got the claim. If you do not, you may still be active in the court proceedings, but the court can use your failure to act against you when it issues you any costs.
There is no set way you are obliged to present your defence. However, in your defence, there are two main actions you must complete:
- you must either admit that your landlord has a right to possess the property or argue that they do not; and
- where you dispute your landlord’s right to possess the property, you must point out why and present evidence that you are correct.
In addition to your defence, you should also write a witness statement which can also explain:
- why you have a right to possession of the property;
- why the tenancy is still valid;
- why you were not in breach of your lease; and
- any reasons for relief from forfeiture.
You must give your landlord a copy of your witness statement within two days of the hearing. You should do the same with the court.
Hearing for Possession
There will be a court hearing regarding the claim for possession. If your landlord is successful, they will grant an order for possession. Alternatively, there might be a case management hearing to discuss how to move forward and potentially give you or your landlord, or both of you, extra time for evidence or defence, where either is insufficient.
If you decide not to attend the court hearing, the court can still make a decision against you.
This cheat sheet outlines what you should be aware of in your lease agreement.
Key Takeaways
If your landlord seeks to gain possession of the commercial premises, they may do this through a claim with the court. This may grant them a court order for possession. If this occurs, you must know how to respond to the court claim. Do not ignore this claim, as you have 14 days to serve your defence. Your response will detail whether you agree with or contest the claim. You can also serve a witness statement for further reasons or evidence. Remember to send this to your landlord and the court at least two days before the court hearing.
If you need help understanding how to respond to a formal claim for possession of a 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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