Perplexed by property law? Relax, Solicitor Beatrice Gallivan is here to answer your most pressing questions…
Q. My tenant has made alterations to the property without asking me and I want to terminate the tenancy. I have heard that there can be problems about being able to forfeit if rent has been paid and I am worried about the effect of this. What can I do if they pay it by standing order?
A. A rent stop, i.e. the procedure put in place to ensure that a landlord or its managing agent does not issue rent demands or collect rent, is sometimes put in place when a tenant is in breach of a lease and the landlord does not want to waive its right to forfeit.
Acceptance of rent acts as an unequivocal recognition of the continuing existence of a lease and, as such, is inconsistent with the landlord forfeiting the lease. So, if you were to accept rent now after having knowledge of the unauthorised alterations carried out by your tenant, you will be waiving your right to forfeit on the basis of this breach.
Any rent that fell due for payment prior to you becoming aware of the breach can be allocated against such earlier rent obligations without undermining the right to forfeit provided that the tenant has not expressly stated the rental period in respect of which the payment is being tendered.
It is important to note that the fact that a landlord may accept rent “without prejudice” to its right to forfeit will not prevent its acceptance from constituting a waiver. While there is less clarity about whether a demand for rent has the same effect as an acceptance of rent, a sensibly cautious approach would be for the landlord to put a rent stop on the account so that rent is neither demanded nor accepted after the landlord becomes aware of a breach if the landlord wishes to keep open the right to forfeit. Of course, if one part of the landlord’s or managing agent’s organisation instructs that rents should not be demanded or collected, then it is sensible to ensure that procedures are put into place to prevent
rent demands or collections from another part of the organisation.
In cases where rent is received but not demanded, the landlord or its managing agents should pay it back to the tenant as quickly as the circumstances permit if they wish to keep open the right to forfeit.
There will be a waiver by a landlord where rent is paid into his bank account despite instructions to his bank not to accept such monies if the landlord takes no steps to repay it to the tenant.
Where forfeiture proceedings have already been issued and the landlord then automatically sends a rent demand for the next quarter and the tenant pays it on the quarter day, it should not amount to a waiver as the lease has already been forfeited by the issue and service of proceedings. However, it would be advisable for the landlord to acknowledge receipt of the payment and state that it has been accepted as “mesne profits” rather than rent.