Forfeiture Of Lease
In a leasehold context, 'forfeiture' means terminating or
bringing a lease to an end. It is a very well established and very
powerful landlord's remedy. The right to forfeit is usually found
in all commercial and residential leases. While there is not a
great deal of statutory protection against forfeiture in relation
to a commercial lease, there is a great deal of protection in
relation to a residential lease. It is very rare for a landlord to
be successful in forfeiting a residential lease.
The counter to forfeiture of lease is the tenant's right to
apply for relief against forfeiture; in other words the right to
apply to the court for an order restoring the lease. The general
position is that the court is inclined to allow an application for
relief provided the tenant cures his breach of covenant, eg pays
Both landlords and tenants need advice in relation to forfeiture
of lease. There are a number of factors to be considered. For a
landlord timing is very important and in relation to residential
leases there are several procedural steps that need to be taken
before a forfeiture claim can be made. A tenant in breach of
covenant may be able to take steps to frustrate his landlord's
attempt to forfeit the tenant's lease.
Forfeiture may be a particularly useful remedy for a landlord of
an insolvent tenant.