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

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 re-entry.

Effect on the subtenant: relief from forfeiture

The main remedy for a subtenant whose sub tenancy has been brought to an end in this way is to apply to court for relief from forfeiture. This is provided for by section 146(2) of the Law of Property

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