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Has your Tenant breached their Commercial Lease?

What can a Landlord do if the Tenant stops paying rent, the outgoings or breaches a fundamental term of their Lease (such as an unauthorised assignment or subletting)?

If the Tenant is in breach of the Lease the Landlord cannot just take possession of the premises. The Landlord is required to serve a Section 146 Default Notice (“Default Notice”) on the Tenant.

This Default Notice should detail the following:

  • which conditions of the Lease the Tenant has breached;

  • when the breach occurred (e.g. when did the Tenant complete unauthorised assignment of the Lease without Landlord consent, or when did the tenant fail to pay the rent);

  • if the breach is quantitative (such as the failure to pay rent and outgoings), specifying the amount that was not paid; and

  • how the breach can be remedied by the Tenant.

The Tenant must be provided with at least fourteen days to remedy these breaches and this must be specified in the Default Notice. If this doesn’t occur the Default Notice will most likely be rendered invalid if challenged by the Tenant.

Landlords should ensure that the Default Notice is accurately drafted as errors in the Default Notice may also make it invalid. Once the Default Notice has been drafted, it must be properly served on the Tenant.

If the Tenant has failed to comply with the notice and the time period has lapsed for compliance, it may then be possible for the Landlord to physically take re-possession of the property Usually, this will require the Landlord or their agent to physically affix a notice in a visible place at the premises, confirming the re-possession.

To discuss your lease or to find out more, please contact Belinda Fenn.

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