Relief from forfeiture by consent
Zestcrest Limited v County Hall Green Ventures Limited [2011]
What happens when your lease is forfeited and your Landlord agrees you can go back in. Can you have relief from forfeiture by consent without making an application to the court? Usually the right to the Landlord being able to forfeit the lease is contained in your lease. If rent is not paid for say 14 days the landlord can renter and then the lease is at an end. Often the tenant will pay the arrears and the tenant is let back in. A recent case of Zestcrest Limited v County Hall Green Ventures Limited [2011] shows that the position is not that simple.
The Landlord had insisted that the tenant went back in providing he made an application to the court for relief from forfeiture under section 139 of the County Courts Act 1984.The tenant complained that as they had agreed,to make the application was a waste of time and money.
The tenant made the application. The court disagreed. The District judge said that on forfeiture the lease came to an end. It wasn’t open to the parties to agree relief from forfeiture.The lease could only continue under the original lease if an application was made.The court ordered that the tenant pay the costs of the application.
So what would be the consequence if the parties did not make an application?
- The old lease would be at an end
- The new lease if the tenant is let back in may well not exclude the Landlord and Tenant act 1954.
- Any guarantees under the old lease will have been released.
- New consents to the lease may be required from any mortgagor or freeholder.
- The rent reviews will be effected and the position of any deposit held.
- If the old lease is pre 1996 thern any covenants from previous tenants or guarantors will be lost.
- There may be Stamp Duty Land Tax paid on the new lease.