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Commercial Eviction

As a commercial tenant or landlord, the key word involved is ‘business’. You are in the commercial property world to make money. But when things go wrong and certain rules are not met, that can mean a loss of money, which nobody wants. 

Whether you're a landlord seeking to reclaim your property or a tenant facing potential eviction, understanding commercial eviction is crucial. Either way, your business is on the line, and understanding commercial eviction can help you work through it, and even avoid it. 

In this article, we shed light on the commercial eviction process, and outline the rights and responsibilities of both landlords and tenants. 

What is commercial eviction?

What reasons are there to evict a commercial tenant?

How does the commercial eviction process work?

How do I evict a commercial tenant without a lease?

How long does a commercial tenant eviction take?

What is forfeiture in commercial property?

What rights do commercial tenants have?

Can I evict a commercial tenant if they have not paid the rent?

Can I evict a tenant if they have breached the terms of their lease?

How can landlords legally prepare for a commercial eviction?

How can tenants legally prepare for a commercial eviction?

How can landlords apply to the court for possession?

What are the alternatives to commercial eviction?

What impact does commercial eviction have on a business?

What is commercial rent arrears recovery?

How can commercial tenants protect themselves from eviction?

What rights does a commercial tenant have?

Can a landlord lock out a commercial tenant?

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What is commercial eviction?

A commercial tenant is an individual or entity that leases or rents commercial property from a landlord for business purposes. This could include leasing office spaces, retail locations, warehouses, industrial sites, or any other type of property used for commercial activities.

Commercial eviction is a legal process where the landlord looks to remove a tenant from a commercial property due to reasons such as non-payment of rent or breach of lease terms. 

The process typically begins with the landlord serving a formal notice to the tenant, detailing the breach and allowing a period for the tenant to remedy the issue. If unresolved, the landlord may proceed to court to obtain a possession order.

What reasons are there to evict a commercial tenant?

The most common reason for eviction is the failure of the tenant to pay rent on time. Commercial landlords typically provide a grace period for rent payment; however, consistent failure to meet this obligation can lead to eviction proceedings​. 

There might also be a breach of the lease terms. Tenants are required to meet all terms outlined in the lease agreement, which can include restrictions on the use of the property, subletting portions without permission, or failing to maintain the property in a manner agreed upon. As well as this, using the leased property for illegal activities or purposes explicitly prohibited in the lease agreement can result in immediate grounds for eviction. This includes violating zoning laws or conducting a business that is not permitted under the terms of the lease​. 

Or, if a tenant causes significant damage to the property beyond normal wear and tear and fails to repair the damage, the landlord may pursue eviction to recover the property and mitigate any further loss or damage. 

At the end of a lease term, if a renewal agreement is not reached or the landlord chooses not to renew the lease, the tenant can be asked to vacate the property. While this may not be an eviction in the traditional sense, it is a legal method for a landlord to regain possession of their property​. 

Landlords must follow a legal process when evicting a commercial tenant, which we explore in this article. 

How does the commercial eviction process work?

Landlords must follow specific steps to lawfully remove a tenant from their property. The process typically starts when a tenant violates the lease terms, such as failing to pay rent or using the property for unauthorised purposes​, as we discussed earlier. 

The landlord must then serve the tenant with a formal notice of the breach. 

The notice must detail the specific breach and often provides a remedy period during which the tenant can correct the issue and avoid eviction​. For instance, a section 146 notice is needed for breaches other than non-payment of rent, outlining the breach and any remedial action required​. 

If the tenant fails to remedy the breach within the specified period, the landlord may continue with forfeiting the lease. This can be done either through peaceable re-entry, where the landlord changes the locks when the property is empty, or by applying to the court for a possession order. 

Should the matter require court intervention, the landlord will need to apply for a possession order. This stage involves presenting the case before a court, demonstrating the breach, and obtaining a legal mandate to evict the tenant if the breach is not remedied. 

Once a possession order is granted, the tenant is typically given a final period to vacate the premises voluntarily. If the tenant fails to leave, the landlord may employ bailiffs or enforcement officers to carry out the eviction​. 

Throughout the eviction process, both landlords and tenants may face various legal and financial implications. Landlords must carefully follow legal procedures to avoid claims of wrongful eviction, while tenants must address the breach or face potential eviction and its associated costs​. 

How do I evict a commercial tenant without a lease?

Evicting a commercial tenant without a formal lease agreement involves a nuanced legal process, as the lack of a formal lease means there are no written terms outlining the conditions for eviction. However, eviction is still possible. 

Without a lease, the grounds for eviction might be more limited and generally revolve around non-payment of rent or the occupant's holdover status after any agreed period has ended.

Even without a formal lease, it's usually required to provide the tenant with notice of the intent to evict. The notice period and format might depend on local laws or any verbal agreements that were made at the commencement of tenancy.

Since there’s no lease to specify eviction terms, the process must align strictly with local commercial tenancy laws. This often involves filing for eviction with a court or local authorities and obtaining a legal order for eviction.

Given the potential complexities and legal risks involved, consulting with a solicitor experienced in commercial property law is crucial. A solicitor can provide advice tailored to your specific situation, helping to navigate the eviction process while minimising legal risks.

In some cases, you may need to go to court to obtain a possession order, especially if the tenant refuses to vacate after receiving notice. The court will assess the situation and, if warranted, issue an order that allows for the eviction of the tenant.

If the tenant does not voluntarily leave after a court order, you may need to use bailiffs or other legal enforcement mechanisms to physically remove the tenant from the property.

It's important to note that evicting a tenant without a lease can present unique challenges, including the lack of clear terms to enforce. This underscores the importance of having a formal, written lease agreement for all commercial tenancies to protect the interests of both landlords and tenants.

How long does a commercial tenant eviction take?

Evicting a commercial tenant can take anywhere from a few weeks to several months. The quickest evictions tend to be for clear-cut cases of non-payment of rent where tenants do not dispute the eviction, while contested evictions or those involving breaches of other lease terms can take much longer.

For non-payment of rent, a landlord may issue a demand for payment with a short compliance period, typically around 14 days​. Depending on what the tenant does from this point, will have an impact on the time it takes. 

If the tenant remedies the breach or vacates the premises within the notice period, the process can be relatively quick. However, if the tenant disputes the eviction, the process can extend significantly. 

If the matter proceeds to court, the timeline can extend further, depending on court schedules and the complexity of the case. The process includes filing for eviction, awaiting a court hearing, and then obtaining a court order for eviction, which itself may provide an additional period for the tenant to comply before forced eviction is enacted. 

What is forfeiture in commercial property?

Forfeiture in commercial property refers to the right of a landlord to terminate a lease and take back possession of the property before the lease term has ended, due to a breach of the lease terms by the tenant. This is used as a last resort when a tenant fails to comply with the conditions in the lease agreement, such as non-payment of rent or other violations.

The process of forfeiture typically begins with the landlord serving the tenant a formal notice, detailing the breach and possibly offering an opportunity to remedy the situation within a specified timeframe. If the tenant fails to address the breach, the landlord can then proceed to re-enter the property, either through peaceable re-entry (changing the locks when the property is unoccupied) or by obtaining a court order for possession.

However, it's important to note that the right to forfeit must be clearly stated within the lease agreement, and landlords must carefully follow legal procedures to avoid claims of wrongful eviction. Tenants also have the right to apply to the court for relief from forfeiture, which, if granted, can allow them to retain possession of the property under certain conditions.

What rights do commercial tenants in the UK have?

Commercial tenants in the UK have a range of rights designed to protect their interests when leasing commercial properties. These rights are outlined in the Landlord and Tenant Act 1954, and can significantly affect lease negotiations, tenancy duration, and the conditions under which a tenancy can be terminated.

This Act gives commercial tenants the right to remain in the property after the expiry of the lease under similar terms, unless the landlord can provide valid grounds for possession that are recognised. Tenants wishing to end their lease at the contractual expiry date can serve a Section 27 Notice on the landlord, whereas those seeking a new lease can serve a Section 26 Notice to propose the terms of the new tenancy​. 

Additionally, commercial tenants have responsibilities which, when fulfilled, protect their rights. These include paying rent and service charges on time, adhering to health and safety regulations, and maintaining the condition of the property. Ensuring these responsibilities are met can prevent disputes and provide a stronger position in negotiations or in protecting tenancy rights. 

The rights under commercial leases also extend to Security of Tenure as provided by the Landlord and Tenant Act 1954, allowing business tenants to request a new lease upon the expiration of the current lease, subject to certain conditions. This right is critical for businesses seeking stability and long-term occupancy of their commercial premises. 

However, these rights can be waived if the lease is "contracted out" of the security of tenure provisions of the Act, emphasising the importance of understanding the lease terms and seeking legal advice where necessary​. 

Can I evict a commercial tenant if they have not paid the rent?

Yes, you can evict a commercial tenant for not paying the rent, but specific procedures must be followed to ensure the eviction is legal and enforceable.

The eviction process for non-payment of rent often starts with the landlord serving a formal notice to the tenant, demanding payment of the overdue rent. If the tenant fails to pay the outstanding rent within the timeframe specified in the lease or as required by law, the landlord may then proceed with eviction actions. This might include forfeiture of the lease for breach of contract, depending on the terms of the lease agreement. 

During the COVID-19 pandemic, there were temporary measures in place to protect businesses that could not pay their rent due to the impact of the pandemic. Landlords were encouraged to work out agreements with tenants rather than beginning eviction proceedings immediately. These measures included a moratorium on evictions and a code of conduct to guide negotiations between landlords and tenants regarding rent arrears caused by the pandemic​. 

Whilst these measures are no longer in place, it still serves as a good guide for negotiations. 

Can I evict a tenant if they have breached the terms of their lease?

Yes, you can evict a tenant if they have breached the terms of their lease. As mentioned previously, landlords must identify the breach that has occurred, like failing to pay the rent or not using the property for authorised purposes. 

Landlords must serve a formal notice, serve a Section 146 notice for breaches other than non-payment of rent, and give the tenant an opportunity to put the breach right within a set time frame. If the tenant puts it right, landlords may not need to go through with eviction. 

If the tenant doesn’t remedy the breach within the time period given, landlords can then proceed with forfeiture of the lease if the agreement includes a forfeiture clause. 

How can landlords legally prepare for a commercial eviction?

For landlords preparing for a commercial eviction, being legally prepared is crucial to ensure the process is smooth and compliant with the law. 

First of all, thoroughly examine the lease agreement to understand the terms and conditions, especially those related to breaches and eviction procedures. The lease document will outline the rights and obligations of both parties and provide the legal basis for eviction​. You need to make sure that this is watertight, otherwise you may not have grounds to evict. 

It is always worth collecting and documenting any evidence of the breach of lease terms by the tenant. This could include records of missed rent payments, photographs of property damage, or communication attempts regarding lease violations. Proper documentation is essential for substantiating the grounds for eviction​. 

Then, before proceeding with eviction, serve the tenant with a formal notice, such as a Section 146 notice for lease breaches other than non-payment of rent. The notice should clearly state the breach, the required actions to remedy the breach, and the deadline for compliance. 

Before moving forward with eviction, consider alternative dispute resolution methods, such as mediation. Resolving the issue outside of court can save time and expenses associated with legal proceedings​. 

If eviction is unavoidable and the tenant disputes the eviction or fails to remedy the breach, prepare for court proceedings. This includes gathering all necessary documentation, evidence of the breach, and a detailed account of the steps taken prior to filing for eviction​ 

At this point, familiarise yourself with the process of enforcing an eviction order, should the court grant one. This might involve hiring bailiffs or enforcement officers to carry out the eviction if the tenant does not vacate voluntarily. 

Through it all, getting expert legal advice will help to minimise the stress involved, and make sure you get the right legal outcome. 

How can tenants legally prepare for a commercial eviction?

As a commercial tenant, facing an eviction can be stressful for not only you personally but your business. So, being prepared is key. 

Make sure you understand the terms of your lease, especially those related to eviction, default and any remediation period. This can help you to understand your rights and any defences you might have against the eviction. 

Keep detailed records of everything, such as communication with your landlord, and the nature of any discussions or disputes. Also, document any payments made, repairs requested or undertaken by you, and anything else relevant. 

If the eviction is due to a curable breach, such as unpaid rent or another lease violation, the best thing to do is to remedy the breach as outlined in your lease agreement. This might involve paying outstanding rent or correcting a lease violation within the time frame given in the notice you received from your landlord.

Before the situation escalates to court, consider negotiating with your landlord to reach a mutual solution. This could involve setting up a payment plan for unpaid rent, requesting more time to remedy a lease violation, or discussing lease modification options.

If, however, negotiations fail and legal proceedings seem imminent, prepare your case for court. This includes gathering all relevant documents, such as your lease agreement, correspondence with the landlord, payment records, and any other evidence that supports your position.

In these situations and where commercial business is involved, consult with a solicitor specialising in commercial property law. A solicitor can provide legal advice tailored to your specific situation, help you understand your rights, and assist in drafting any necessary legal responses or negotiating with the landlord.

How can landlords apply to the court for possession?

To apply for court possession as a landlord, start by serving a section 8 or section 21 notice under the Housing Act 1988, specifying when the tenant should leave. 

If the tenant remains past this date, file a possession claim with the court, including evidence of any impact from the coronavirus pandemic on you or the tenant. The court process involves several stages, including serving notice, making the claim, a possible hearing, and then enforcing eviction if necessary. 

You can only use this service if you are over 18, own a property in England, and if you’re owed money in rent or mortgage payments.  

You will have to pay £355 to file a possession claim order with the court and you can apply online or by post. 

For detailed guidance, consult the official UK government publication on understanding the possession action process for landlords in England and Wales. 

What are the alternatives to commercial eviction?

Alternatives to commercial eviction include renegotiating the lease terms to better suit both parties' current situations, agreeing on a payment plan for any arrears, mediation to resolve disputes amicably, and offering the tenant an incentive to vacate voluntarily. These alternatives can preserve the landlord-tenant relationship and avoid the costs and time associated with eviction proceedings.

What impact does commercial eviction have on a business?

Commercial eviction has a direct impact on business operations. If evicted, it can lead to potential loss of revenue, customer base, and employee displacement. 

It may also harm the business's reputation and result in financial strain due to the costs associated with finding a new location and moving. Moreover, the eviction process can be time-consuming, further affecting the business’s ability to operate smoothly.

This is why it is important to try and remedy any breaches as soon as possible and keep an open and communicative relationship with the landlord throughout the commercial tenancy. This can go a long way in protecting your business from eviction. 

What is commercial rent arrears recovery?

Commercial Rent Arrears Recovery (CRAR) is a legal mechanism in England and Wales that allows landlords of commercial properties to recover rent arrears by taking control of their tenant's goods and selling them. 

It only came into effect on 6 April 2024, but it applies with immediate effect to all new and existing commercial leases from that date onwards. 

This process can only be used for the main rent, VAT, and interest; it cannot cover other charges like service charges unless they are defined as rent within the lease. 

To use CRAR, landlords need to give 7 days notice of enforcement and when that period has expired, Certified Enforcement Agents (not bailiffs) can then enter the property through an open or unlocked door, to seize goods. 

CRAR can be applied even if there is no reference to it in the lease. 

How can commercial tenants protect themselves from eviction?

In the simplest of terms, commercial tenants can protect themselves from eviction by following the terms of the lease, making rent payments on time, using the property for the agreed instances, and taking care of the property well. 

By maintaining open communication with the landlord, tenants can protect themselves from eviction and can even come to negotiations to save themselves from eviction. 

Can a landlord lock out a commercial tenant?

In certain circumstances, a landlord may have the right to lock out a commercial tenant, particularly as a means of executing forfeiture of the lease due to rent arrears or other breaches of lease terms. 

However, this action, known as peaceable re-entry, must be done lawfully and typically after specific procedures, including notices, have been followed. It's crucial for landlords to carefully consider the legal implications and risks, including wrongful eviction claims. Tenants facing such situations should seek immediate legal advice.

Get support with Lawhive

Here at Lawhive, our expert commercial property solicitors can support you with commercial eviction, whether you are a landlord or a tenant. They will give you advice, guidance and support to keep your business thriving. 

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