The UK guide to commercial tenant eviction
A step-by-step process for landlords and tenants.
By Alan Boswell Group
As the landlord of a commercial premises, there may come a time when you have to evict a tenant and take back possession of your property. There could be several reasons for doing so, mostly concerning breaches of the terms of the lease, such as non-payment of rent, subletting without permission, or failing to adequately maintain the premises.
In this guide to evicting a commercial tenant, we explore the process of initiating eviction, the associated legal implications, and the tenant's rights. We’ll also see why commercial property insurance is so vital to protect you against the risk of a legal dispute with your tenant, as well as other risks.
Evicting a commercial tenant can be a complex legal process that involves risk. While this page provides an overview, we strongly recommend seeking advice from a specialist commercial property solicitor before taking any action.
The foundations: the lease and the Landlord and Tenant Act 1954
The Landlord and Tenant Act 1954 (LTA) grants tenants of commercial properties the right to occupancy, known as security of tenure. This means that tenants have the right to renew the lease and remain in the property after the lease term ends, provided they continue to pay rent and have not breached any terms of their tenancy agreement. However, the landlord can exclude this provision of the LTA from the lease agreement, as long as it is done in agreement with the tenant and the correct process is followed. The tenant will then be required to give up possession of the premises when the tenancy expires, unless the landlord grants a new lease.
For more details, see our guide to commercial landlord rules and regulations or the government’s official guidance.
Grounds for eviction
There are three main reasons you may want to take back possession of your commercial property:
Commercial eviction for non-payment of rent
Under the Commercial Rent Arrears Recovery (CRAR) process, commercial landlords have the ability to recover unpaid rent without applying to the courts. Landlords can instruct a certified enforcement agent to enter the premises and recover the tenant’s goods to sell them to cover the unpaid rent. Notice must be served to the tenant seven days prior to taking action.
There are also certain conditions that must be satisfied under CRAR: the property use must be solely commercial, there must be a written tenancy agreement in force, the rent must be at least seven days overdue, and CRAR can only be used to collect “pure rent” – that is, not service charges, insurance costs, or any other charges the tenant is responsible for under the lease.
Commercial eviction for breach of the terms of the lease
Breaches of the commercial lease can include subletting without permission, illegal or unauthorised use of the property, making unauthorised alterations, any other action expressly forbidden under the terms agreed upon.
In the event of a breach, you must serve your tenant with a Section 146 notice before you can claim possession of the property. This notice, served by a commercial property solicitor to all interested parties, must outline the nature of the breach and the requirement for any remedial action or compensation.
Commercial eviction for breach of the repair condition
For the tenant to be in breach of the repair condition, the property must be in a state of disrepair, which means a deterioration of its physical condition. As a landlord seeking eviction, you must serve a Section 146 notice that outlines the breach and gives the tenant reasonable time to remedy the issue. Once this period has elapsed, you are entitled to peaceably re-enter the premises or begin court proceedings to evict the tenant.
What is a Jervis and Harris clause?
A Jervis v Harris clause in a lease agreement allows a landlord to serve notice on a tenant, requiring them to carry out repairs. If the tenant fails to do so, the landlord can enter the premises, carry out the necessary repairs, and recover the costs from the tenant.
The eviction process
If you want to evict a commercial tenant, you will need to claim back possession of your premises through a process known as “forfeiture”. However, to make this possible, you must ensure that sure you include a “forfeiture of lease” clause in the commercial lease agreement. This allows you to “peaceably re-enter” a property if there has been a breach of the lease.
Step 1: Forfeiture (for breach of lease)
If the tenant has breached their lease due to non-payment of rent, once the rent is seven days overdue, you can serve notice to the tenant that you plan to take action to recover the rent. Once that time is up, you can instruct a certified enforcement agent to enter the premises and recover the tenant’s goods to sell them to cover the unpaid rent.
Other possible breaches of the lease can include letting the property fall into disrepair, subletting without permission, illegal or unauthorised use of the property, making unauthorised alterations, or anything else forbidden in the lease agreement. For these breaches, you need to serve a Section 146 notice before claiming possession. If the property has fallen into disrepair, you must give the tenant a reasonable amount of time to rectify the situation.
Step 2: Regaining possession
Once a qualifying event has taken place to allow you to forfeit the lease, and assuming your lease agreement has a forfeiture and re-entry clause, you can instruct a certified bailiff to enter the premises without recourse to the courts. This can include breaking the locks to gain entry and changing them to bar the tenant from gaining access. However, bailiffs are not permitted to use any physical force against any person on the premises to gain access; peaceable re-entry can only be used on a vacated property.
Changing the locks is a clear signal to your tenant that you have terminated the lease and effectively evicted them. It’s worth noting that a tenant may apply to a court for relief from forfeiture (see below) to have the lease reinstated. However, for this to be granted, they would need to pay all outstanding rent and the landlord’s costs associated with the forfeiture. A court is unlikely to award relief if the landlord has already granted a lease to a new tenant.
The other route to regaining possession is to apply to your local county court for a possession order. This is often regarded as legally safer, but it can take much longer. Once your solicitor has issued proceedings, the court will set a date for a hearing, at which point the tenant has 14 days to either file a defence to your claim or apply for relief from forfeiture. At the hearing, the court will rule on whether possession can be granted or adjourned to gather more information. If you choose to pursue legal proceedings, legal expenses insurance can help cover the associated costs.
Once you have successfully evicted your tenant, it’s worth considering unoccupied commercial property insurance to protect your property while you renovate it and/or seek a new tenant.
Glossary of key terms and notices
Forfeiture |
A landlord’s right to terminate a lease when the tenant has breached its terms. Reasons for forfeiture can include non-payment of rent, unauthorised subletting, or failure to maintain the property. |
Section 146 notice |
A notice served by a landlord to a tenant under Section 146 of the Law of Property Act 1925, informing the tenant that they are in breach of their lease. If the tenant fails to remedy the breach, they will forfeit the lease. You must serve a Section 146 notice before you can take action to reclaim your property. For more details, see this guidance from the Leasehold Advisory Service. |
Section 25 notice |
A notice served by a landlord to a tenant under Section 25 of the Landlord and Tenant Act 1954, informing the tenant that the lease will end on a particular date. |
The tenant’s perspective
Commercial tenants in the UK have a right to apply for relief from forfeiture. This provides them with the option to remedy any breaches of the lease, including paying off any rent arrears and costs incurred to recover them, making any necessary repairs to the property, and repaying costs incurred by the landlord in changing the locks, etc. Once a court grants a possession order, tenants typically have 28 days to apply for relief by paying rent arrears or remedying other breaches, or must vacate the premises.
How a tenant can legally end a lease
Under a break clause, either the tenant, the landlord, or both parties have the right to terminate a fixed-term commercial lease before the agreed-upon end date. Some break clauses can only be exercised at specific points (for example, halfway through the lease term), while others work on a “rolling” basis and simply require a specific notice period (for example, three months). Break clauses are typically included in the lease agreement when it is drafted and signed.
A tenant can also serve their landlord with a Section 27 notice under the Landlord and Tenant Act 1954, giving them notice to terminate a fixed-term lease. The tenant must give three months’ notice in writing.
Practical questions
The time it takes to evict a commercial tenant depends on the circumstances of any breach of the lease and the route you want to take (peaceable re-entry or court order). Peaceable re-entry can take just a couple of days – but bear in mind the tenant can still apply for relief from forfeiture. Using a court order may strengthen a legal case, but it can take several months and incur additional costs.
Commercial solicitors may charge between £500 and £800 for straightforward commercial eviction proceedings; however, costs can quickly escalate in the event of disputes or protracted court proceedings. Recovering unpaid rent or other costs – such as repair costs – can also be time-consuming and expensive, so it’s vital to have commercial legal expenses insurance, which is usually available as an optional extra to your commercial property insurance cover. This can provide cover to defend your legal rights in a dispute with your tenant over maintenance, repossession, and recovering outstanding rent – but be sure to check your policy terms, as not all policies will cover disputes with tenants.
For a legal expenses claim to succeed, you must tell your insurer before any action is taken and follow their advice. Insurers will also often appoint their own panel solicitors to act on your behalf. Note that not all commercial legal expenses policies cover the cost of recovering outstanding rent, so check the policy wording carefully before purchasing.
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FAQs
Yes, you can either take peaceable re-entry possession of your property or serve a Section 146 notice and go through the courts to gain possession.
Yes, a commercial landlord can change the locks on their property either by peaceable re-entry, or as soon as forfeiture of the lease has been agreed by a court.
Landlords cannot forfeit the lease if their tenant has entered administration or is the subject of compulsory liquidation. If this happens, the landlord must apply for permission from the court, administrator, or liquidator, who should agree to the forfeiture if the administrator is not occupying the premises and the business is no longer trading.
However, if you do forfeit the lease, you lose the right to claim for unpaid rent, and it may not be wise if the administrators have moved in and are trying to sell the business as a going concern. If they were successful, you would be entitled to rent and a new owner may be keen to continue with the lease. Also bear in mind that an empty property is subject to business rates after three months, and you will also need to arrange unoccupied commercial property insurance.
A periodic tenancy is where the fixed term specified in the lease has ended, and the tenancy rolls over on the same terms from period to period (a period being the length of time between rent payments).During this period, both the landlord and tenant have the same rights and obligations as they did under the old lease. If both parties have opted out of the security of tenure specified in the LTA, the landlord will be able to take possession by giving a certain amount of notice as specified in the expired lease. If, however, the tenant does have security of tenure, the landlord can only obtain possession by applying to court for a Section 25 notice. The grounds for refusing a lease renewal, found under Section 30(1) of the Act, are:
the tenant’s failure to keep the premises in a good state of repair;
persistent late payment of rent;
other substantial breaches of the tenancy agreement;
provision of alternative premises on reasonable terms;
demolition, reconstruction, or sale of the property;
the landlord can prove that they intend to occupy the premises for their own business.
The tenant should be given the chance to access the property, under supervision, to collect their possessions, but it is a criminal and civil offence for them to break into the property once the lease has been forfeited by the landlord. Alan Boswell Group has a wealth of advice and specialist insurance offers for commercial landlords.
Legislation and guidance included in this article is correct as of January 2023. Please note that legislation does change, it is always best to check the most up to date guidance on gov.uk, and seek legal advice before taking action.
Commercial tenants in the UK have a right to apply for relief from forfeiture. This provides them with the option to remedy any breaches of the lease, including payment of any rent arrears, making any repairs to the property, costs taken to recover them, and costs incurred by a landlord in changing the locks etc. Once a possession order is granted by court, tenants usually have 28 days to apply for relief - by paying rent arrears or remedying other breaches - or vacate the premises.
The Landlord and Tenant Act 1954 (LTA) gives tenants of commercial properties rights of occupancy known as security of tenure. It means that tenants have the right to renew the lease and stay in the property after the end of the lease term, as long as they continue to pay rent and have not breached any terms of their tenancy agreement. However, the landlord can exclude this provision of the LTA, as long as it is done in agreement with the tenant and the correct process is followed. The tenant will then be required to give up possession of the premises when the tenancy expires unless a new lease is granted by the landlord. See our guide to commercial landlord rules and regulations for more detail.
Commercial solicitors may charge somewhere between £500 and £800 for straightforward commercial eviction proceedings, but the costs can quickly rise in the event of disputes or protracted court proceedings. Recovering unpaid or other costs - such as repair costs - can also be a time-consuming and expensive process, so it’s vital to have legal expenses insurance, usually an optional extra to your commercial property insurance cover.
Commercial legal expenses insurance provides cover to defend your legal rights in a dispute with your tenant over maintenance of your property, repossessing your property, and recovering outstanding rent due to you. For a legal expenses claim to be successful, it is imperative that you inform your insurer before any action is taken, and follow the advice of the insurer’s legal helplines. Insurers will also often appoint their own panel solicitors to act on the client’s behalf. It is important to note, though, that not all commercial legal expenses policies will cover the cost of recovering outstanding rent. Before taking out a policy it is best to check the policy wording to confirm if this is covered.
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