Q&As

Can a headlease be forfeited by re-entry (due to the tenant being in arrears of rent) when there is a subtenant in lawful occupation? What is the effect on the subtenant and who can it claim against for damages for any loss of business/interruption?

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Produced in partnership with Alexander Campbell of Field Court Chambers
Published on LexisPSL on 10/04/2018

The following Property Disputes Q&A produced in partnership with Alexander Campbell of Field Court Chambers provides comprehensive and up to date legal information covering:

  • Can a headlease be forfeited by re-entry (due to the tenant being in arrears of rent) when there is a subtenant in lawful occupation? What is the effect on the subtenant and who can it claim against for damages for any loss of business/interruption?
  • Forfeiture of a headlease by re-entry
  • Effect on the subtenant: relief from forfeiture
  • Effect on the subtenant: granting of a new lease
  • Effect on the subtenant: action for damages against the intermediate landlord

Can a headlease be forfeited by re-entry (due to the tenant being in arrears of rent) when there is a subtenant in lawful occupation? What is the effect on the subtenant and who can it claim against for damages for any loss of business/interruption?

This Q&A explains whether a headlease can be forfeited by re-entry due to the tenant being in rent arrears even though there is a subtenant who is in lawful occupation. The Q&A will further address the effect on that lawful subtenant.

This Q&A concerns business tenancies only because a residential tenancy cannot lawfully be forfeited by peaceable re-entry whilst someone is lawfully residing in the premises: section 2 of the Protection from Eviction Act 1977.

Forfeiture of a headlease by re-entry

Where a headlease is forfeited by peaceable re-entry, the headlease comes to an end. When the headlease is determined, any derivative interests, including any subtenancies, are also brought to an end: Great Western Railway Company v Smith; Moore Properties (Ilford) Ltd v McKeon.

Thus, the subtenancy will automatically be brought to an end when the headlease is forfeited by peaceable

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