Protection for tenants from forfeiture despite non-payment of rent

The case of Pineport Ltd v Grangeglen Ltd saw a commercial tenant, whose long lease had been forfeited by re-entry for non-payment of rent, entitled to relief from forfeiture despite the fact that it took the tenant fourteen months to apply to the court.

In this particular case the tenant had paid £90k for a 125 year lease and, after committing certain regulatory and criminal offences, fell into service charge arrears. The landlord forfeited the lease but had not re-let the property before the tenant applied to the court.

Despite the lengthy delay the High Court decided that it was wrong to consider the delay in isolation without regard to all of the circumstances. The court’s discretion is a broad one and there were a number of issues in this case which it took into account as relevant which overrode the serious delay on the part of the tenant, not least the potential loss of the premium.

As is usually the case, the court held that the tenant was entitled to relief on the condition that it paid all arrears and costs.

Although tenants might take comfort in this decision it is clear from the circumstances of this case that the court would not take the same view on a short term occupational lease where no premium was paid. There would in that case be no compelling reason for the court to grant relief.

Alasdair works in our commercial property team. He began his career with Nabarro LLP and joined us from Charles Russell LLP. He is a member of the Ethical Property Foundation. An experienced commercial property specialist, Alasdair deals with a wide range of work in relation to sales & acquisitions, development transactions, landlord and tenant and property management matters.