Property eviction can be a complicated procedure. If a commercial landlord engages in an unlawful eviction, they may become liable to the tenant for consequential losses and relief against forfeiture.
What is relief against forfeiture?
Relief against forfeiture (as it applies to leases) is where a court or tribunal makes orders that enable a tenant to return and occupy the premises that had been (intended to be) re-entered by a landlord (usually after the tenant has defaulted on rental payments). The relief does not depend on a mistake or failure to properly act on the part of the landlord. It may be the case that the landlord has exercised its rights appropriately in accordance with the lease. Rather, relief against forfeiture is an equitable remedy that is based on a matter of fairness or equity, that preserves a tenant’s right to occupy its leased premises if the tenant can prove it would be unfair not to allow the tenant to return to the premises, if it can demonstrate that it can rectify the default.
How does it work?
If a landlord has re-entered premises on a valid basis, then the tenant may either:
- Accept that it has lost the right to occupy the premises under its lease; or
- Consider commencing legal action claiming relief against forfeiture.
If the tenant opts to proceed with legal action, then the tenant will need to demonstrate to the tribunal or court that it can and will remedy the breaches (including satisfying all outstanding rental payments), and that it will not be in breach again.
Generally speaking, a tribunal or court will almost certainly grant relief against forfeiture if the tenant makes good the breach and/or any financial loss, and if the tenant can demonstrate that it is able and willing to fulfil its obligations under the lease in the future.
There are special circumstances to justify a tribunal or court in refusing to grant relief from forfeiture, depending on the facts of each case. There are two grounds landlords tend to plead to show special circumstances:
- Wilfulness of the breach; and
- The tenant’s financial inability to meet obligations pursuant to the lease.
If you would like to know more about relief against forfeiture, contact Steven Dangerfield, Angela Catanzariti or Lynda Lim of Dangerfield Exley Lawyers for a frank discussion on your legal rights.
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