If you are a landlord in the UK, you may at some point need to evict a tenant to take back possession of your commercial property (i.e. offices, retail premises, warehouse, factory, leisure or healthcare facility).
The legal process for evicting a commercial tenant is quite different to residential eviction. Ending a commercial tenant’s right to occupy a premises early is known as ‘commercial lease forfeiture’. This means a landlord can end a lease early if the tenant is in breach of their obligations.
In this article we will explore:
Legal requirements for the forfeiture of a commercial lease
How to evict a commercial tenant: step by step guide
Can you evict a commercial tenant for not paying rent?
How long does it take to evict a commercial tenant?
Can I evict a commercial tenant without notice?
Common commercial eviction defences and counterclaims
Legal requirements for the forfeiture of a commercial lease
If you want to forfeit the lease of a premises, you must have a legal reason to do so such as:
Non-payment of rent
Breach of the terms of the lease (i.e. subletting without permission)
Breach of the repair condition
End of fixed-term lease term
As well as this, the lease agreement must have a valid forfeiture clause that states what a tenant needs to do (or not do) to be in breach of the lease agreement, and what the outcome will be such as peaceable re-entry of the property by the landlord or court proceedings to see forfeiture of the lease.
Examples of forfeiture clauses include:
If the Tenant fails to pay the rent within 14 days of the due date, the Landlord shall have the right to peaceably re-enter and forfeit the Lease.
In the event of material breach of any covenant or condition of this Lease by the Tenant, the Landlord may, at its sole discretion, initiate court proceedings to seek a forfeiture of this Lease.
You must also serve the tenant with written notice of the breach and give them time to put the breach right. Following that, if the tenant does not remedy the breach, you can proceed with the eviction process.
In many cases, it is advisable to seek expert help from a commercial property solicitor when you draw up a lease agreement and before you take steps to evict a commercial tenant, as without a valid forfeiture clause, you cannot legally forfeit a lease.
How To Evict A Commercial Tenant: The Process
The process of evicting a commercial tenant can vary depending on the terms of the commercial lease (if there is a lease at all), and the reason for eviction. However, by and large, it will follow the below process:
1. Identify the breach of the lease agreement
Assuming there is a lease, you should review the agreement to ensure that you have legal grounds for eviction before taking any formal steps to evict the tenant. This is where forfeiture clauses come into play. If your lease doesn’t have one, you cannot legally forfeit a lease.
Your next steps are dependent on the reason for taking back possession of your commercial property.
If you want to evict a commercial tenant without a lease, you can still follow this process. However, it is even more important to find a solicitor to help you, as it can be difficult to prove the terms of the lease when you have nothing in writing.
2. Serve notice to the tenant
When you have reviewed the lease agreement, identified the breach, and the related forfeiture clause, in most cases you should serve a Section 146 notice.
This notice covers breaches like unapproved alterations, damages, subletting without consent, and noise complaints.
A valid Section 146 notice must specify what the breach is, how the tenant must remedy the breach (if possible), outline requirements for compensation and give the tenant ‘reasonable’ time to put the breach right.
It's very important to have proof of delivery of this notice, either by hand delivering the notice with a witness, or using a process server. You should also keep a copy of this notice for your records.
Under the Landlord and Tenant Act 1954, commercial tenants have the legal right to renew a lease at the end of the lease term, unless the lease specifically contracts out of the Act.
Where the Act doesn’t apply, a tenant that refuses to leave at the end of the term can be evicted via a court order.
3. Get a court order
If the tenant does not leave the premises of their own accord or fix the breach, you may need to start court proceedings to get a Possession Order.
To do this, a claim form must be submitted to the court, including relevant details such as the grounds for possession and any supporting evidence. The claim is then served to the tenant who is given a time frame to respond in which they can:
File a defence
File a counterclaim
Seek additional time to respond.
If the tenant does not dispute the claim or a resolution cannot be reached, a court hearing will be scheduled.
4. Go to the court hearing
At the court hearing, both parties (or their legal representatives) present their arguments in the county court. A judge will then decide whether to grant the possession order.
Prior to the hearing it is advisable to make sure you have up to date copies of:
The lease agreement
Rental payment records
Communication logs (such as texts, notes, emails, voicemails, etc)
A copy of the notice served to the tenant and proof they received it
If a landlord receives a favourable judgement, the judge will give them permission to take back possession of the property. The possession order will specify the date by which the tenant must leave the commercial property.
6. Enforce the possession order
If a landlord is given a possession order, and the tenant doesn’t leave voluntarily, a landlord can use County Court bailiffs to enforce the order. However, wait times for County Court bailiffs can be anywhere between 6-8 months, which may not be ideal for some landlords.
Should a landlord wish to accelerate the process they can transfer the Possession Order to a High Court Writ of Possession. With this, private bailiffs working under the instruction of a High Court Enforcement Officer can enforce the writ.
Can I evict a commercial tenant for not paying rent?
Under the Commercial Rent Arrears Recovery (CRAR) process, if a commercial tenant has not paid their rent within a certain timeframe, and you have a valid forfeiture clause in the tenancy agreement, you can evict the commercial tenant, either by:
Peaceable Re-Entry: Providing there is a valid forfeiture clause in your agreement that states you have a right to peaceably re-enter the property, change the locks and end the lease if rent is not paid in a certain amount of time*. In these cases, a notice of repossession should be left on the door to the premises seven days before action and a witness, such as a solicitor or locksmith, should be present.
Serve a section 146 notice: Specify what the breach is, how the tenant must remedy the breach (if possible), outline requirements for compensation and give the tenant ‘reasonable’ time to put the breach right.
It is important to seek legal advice before moving forwards with peaceable re-entry, as a tenant could apply for relief from forfeiture, and in some cases you could be committing a criminal offence if you attempt to retake possession in the wrong way.
How long does it take to evict a commercial tenant?
There are many things that influence how long the commercial eviction process takes in the UK, such as the action you choose to take, what the tenant decides to do, how long it takes to get a possession order and if you need to enforce that possession order with the help of bailiffs.
As you may imagine, the quickest route would be to re-enter the premises and change the locks. In these cases, the matter could be dealt with in days. But there are potential legal ramifications to this which could be costly and even more time consuming if you do not seek specialist legal advice in regards to your specific situation.
In some instances, where the tenant does not dispute a landlord’s decision, it could take as little as 6 weeks, while other cases that have to go to court and involve bailiffs may take upwards of 8-12 months.
Other things that may significantly increase the time it takes to evict a commercial tenant include: invalid serving of notice; allowing the tenant to occupy the property after expiry of the lease or the tenant making a counterclaim.
Can I evict a commercial tenant without notice?
No. To evict a commercial tenant you must give them written notice, including how they have breached the agreement and what the next steps are. You must also give the tenant 'reasonable' time to put things right before proceeding with the eviction. Failure to give the proper notice could end with a tenant taking counter legal action against you.
Can I evict a commercial tenant from a mixed use property?
It is not uncommon for commercial tenants to rent commercial properties with a flat above them. While you can forfeit the lease through court proceedings, as detailed above, a landlord or bailiff can’t repossess the property through peaceable re-entry at all as the law says that tenants of mixed-use properties should be treated the same as residential tenants.
What are common commercial eviction defences and counterclaims?
It is not uncommon for tenants to defend themselves from commercial eviction. If this happens, it is important that a landlord gets help sooner rather than later from a specialist landlord and tenant solicitor. As a general rule, the longer the eviction process takes, the more expensive and time consuming it becomes - not to mention stressful!
What’s more, if a commercial eviction is not carried out in accordance with the law, a tenant may be able to make a counterclaim, which could end with the landlord having to pay damages.
Defences and counterclaims that courts see include:
Unlawful eviction
For example, if a landlord tries to take back possession for reasons unrelated to breach of lease, and there is no valid forfeiture clause, the landlord may be seen to have unlawfully, or illegally, evicted the tenant.
Generally, the tenant must abandon the premises in order to sue the landlord for unlawful eviction, therefore this type of counterclaim tends to be raised in response to a landlord’s claim for damages as opposed to the action for possession.
Failure to give proper notice
Commercial landlords have to give sufficient notice by law. For example, if a tenant is being evicted for not paying rent, the landlord must serve the notice at least seven days before taking action before entering the premises and recovering the tenant’s goods to sell them to cover rent arrears.
For breach of lease evictions, the Section 146 notice must set out the breach and give the tenant a reasonable time to remedy it.
If there is no lease, it is even more important that a landlord seeks specialist help to determine how to correctly give notice to a tenant.
Landlord breach of tenancy
A tenant may also make a counterclaim that the landlord failed to carry out their obligations as detailed in the lease agreement. The aim of this type of claim is generally to recoup losses the tenant believes that have suffered as a result of the breach.
It is advisable to keep a record of all communication with the tenant and invoices for work carried out on the property, should this documentation be needed as evidence.
Alternatives to commercial eviction
Maintaining good relationships with commercial tenants is beneficial to landlords for a number of reasons. Because of this, you might not want to go through the formal, stressful, costly process of eviction if you don’t have to. And we don’t blame you! Luckily, there are ways and means to resolve commercial tenant disputes aside from eviction. This includes:
Talking it out: Sometimes a calm conversation between landlord and tenant is all that’s needed to smooth over an issue that might otherwise escalate if left unaddressed,
Mediation or arbitration: Both mediation and arbitration involve using a neutral third party to help you reach an agreement, this can be particularly effective as an initial alternative after communication has broken down.
How can we help with your commercial eviction?
Commercial landlords in the UK have a number of avenues to explore if they are considering taking action against a tenant. However, if you are, it’s important to have a clear understanding of the costs of the process and the strength of your case, among other factors.
If you find yourself in a position where you need to evict a commercial tenant, we can help you understand the process and find affordable, quick legal solutions so you can move forward. To get started, simply tell us about your case and we will give you a fixed-fee quote in less than 5 minutes and match you with the very best experienced landlord and tenant or commercial property solicitor for your case.