How To Evict A Commercial Tenant Without A Lease

If you’re a landlord, and if you have a tenant in occupation of commercial premises without a lease, you need to be very careful before trying to evict them.

In many cases you’ll be able to get them out, but you shouldn’t try without taking legal advice because the options available to you where there isn’t a written agreement will be dictated entirely by the facts.

Rather than trying to evict them in the conventional sense of the word you might try to focus on convincing the tenant that it would be in their best interests to leave of their own accord.

 

How To Evict A Commercial Tenant Without A Lease

There are several ways to evict a commercial tenant where there is no written lease in place.

As we’ll see, it will often be the case that a tenant without a lease will have obtained a level of protection, allowing it to remain in the premises.

 

Implied Tenancies

The protection referred to above is often obtained via the tenant having an “implied tenancy”.

A “periodic tenancy” is a very common type of implied tenancy.

As the name suggests, a periodic tenancy is “implied” where there is a landlord and tenant relationship and rent is demanded and paid by reference to a particular period of time, such as every week, or every month.

Where a periodic tenancy is implied, a landlord will be left with the option of waiting, potentially a long time, to get them out by serving notice and then applying to court.

I have set out further details of that process below.

Alternatively, a landlord might try to negotiate a quicker resolution.

 

An Alternative Approach

I’ve recently done just that for a client whose tenant had been in occupation of commercial premises for a long time without a written lease.

They’d been in occupation carrying on business for many years, paying the rent regularly on a periodic basis.

In this scenario a periodic tenancy was very clearly implied by the conduct of the parties, even though nothing was set out in writing.

Where a periodic tenancy such as this is implied the tenant will benefit from the protection of Part II of the Landlord and Tenant Act 1954.

This essentially means that the tenant can only be removed in very specific circumstances prescribed by the Act (see further on that below).

 

Exercise Caution

In light of that, if my client had tried to evict the tenant without following the correct procedure it’s very likely that the tenant would have applied to court for an injunction to have them put back in.

In that scenario my client would have been liable for their legal costs and would have been back to square one.

 

Using Leverage

Instead we got creative and focused on something else.

We used the leverage of a debt that my client held over the tenant.

Here my client agreed to waive part of the debt in exchange for the tenant giving up possession.

This was cheaper and quicker than serving notices and applying to court for an order for possession.

It was a commercial deal that suited both parties, saving them both a lot of time and money.

 

Tactics

Where a tenant has built up a debt by not paying its rent a good tactical option might be to send a “Letter Before Action” to the tenant, threatening to sue it for the debt, whilst also writing separately to offer it a way out of that debt by agreeing to leave voluntarily.

If you’d rather simply pursue the debt take a look at my article on the 10 options available where you have a commercial tenant not paying rent.

Fact Specific

You can see how my case above was very fact specific.

This is always the case where there is no written tenancy agreement.

The facts will always dictate which options are available to you as the landlord.

If your tenant is not the type who is prepared to negotiate, you will probably need to use one of the more traditional approaches to get them out.

Serve Notice Under The 1954 Act

Where an implied  periodic tenancy exists a landlord can try to use the provisions of the Landlord and Tenant Act 1954 to remove a commercial tenant.

This Act sets out a few scenarios where a landlord can serve notice on its tenant.

The most common scenarios are where you intend to demolish or redevelop the premises, or when you intend to occupy them yourself.

There may also be scenarios where a tenant’s persistent delay in paying rent might assist.

If any of the scenarios set out in this Act apply the landlord can serve a notice upon the tenant to terminate its tenancy and to oppose the grant of a new one.

In certain circumstances some compensation might be payable.

It is often the case that once one of these notices has been served the tenant will agree to vacate the property early.

If not you should be able to ask the court for a possession order to evict the tenant.

 

“Unopposed” Notices

If a landlord has a tenant with a protected tenancy (i.e. where the tenant has an implied periodic tenancy) but where the landlord is not able to rely upon any of the grounds set out in the 1954 Act it might decide instead to serve an “unopposed” notice on the tenant.

An unopposed notice has the effect of terminating the current tenancy  but proposes terms for a new tenancy, which must be documented in writing.

That notice may include a proposal for an increase in the rent that the tenant has to pay.

That rental increase, if justified, could convince the tenant to leave.

There are two more potential benefits to serving such a notice:

1. As any new lease would need to be documented in writing this would very likely involve the inclusion of key clauses that you’d expect to find in a commercial lease that the landlord could enforce; and
2. If the tenant fails to sign a new lease by expiry of the unopposed notice (or apply to court to protect itself) its rights of occupation will fall away and it will be trespassing.  That would allow the landlord to apply to court for an order for possession of the premises to evict the tenant in the usual way.

Often a tenant will want to avoid a rental increase, or bury its head in the sand after receiving such a notice, giving the landlord a good opportunity to get the property back.

Evict The Tenant Via Forfeiture

When we talk about evicting commercial tenants we often refer to “forfeiting” the lease, which is an alternative phrase for terminating the lease.

This method of evicting a commercial tenant is usually used where the tenant has failed to pay its rent.

The landlord can do this by changing the locks (which is also known as “peaceable re-entry”) or by applying to court for a possession order to evict the tenant.

You can read more about the process involved here.

This is an excellent way to get the property back if you have a bad tenant.

It will not always be available however, and probably not when trying to evict a commercial tenant without a lease.

 

Can You Forfeit When There Is No Lease?

If there is no written tenancy, how do you know if the right to forfeit has arisen, or if it even exists?

It’s generally accepted that the right to forfeit must be expressly set out in a lease.

If it isn’t the landlord might arguably have an implied right to forfeit if the tenant breaches a clause of the lease that is considered to be a condition of it.

So, if for example, a landlord wants to evict a commercial tenant without a lease for non-payment of the rent, it might argue that it is able to do so where the right to forfeit is not expressly reserved to it, but where payment of the rent is reserved as a condition.

The problem here is that without a written lease you can’t say with any certainty which rights have been reserved and which rights haven’t.

 

Is It Worth A Try?

I can see the potential merit in an argument that payment of the rent should be deemed a condition of an implied tenancy.

However, it is a very brave landlord who will try to forfeit where there isn’t a written agreement in place, as they could be sued for wrongful eviction by the tenant.

I have seen some commentary in support of tryin this, but I would not recommend it myself.

That said, there will be some landlords who are prepared to take a commercial view where they are comfortable with the associated risks involved

 

What About When There’s Not An Implied Tenancy?

There will be occasions where the “tenant” will not have the benefit of the protection referred to above, and there won’t be a lease at all.

This might be where they haven’t been in occupation for that long, where the rental payments (or no payments at all) don’t point to an implied tenancy, or where some other conduct between the parties is relevant.

If the facts are favourable to you it might be the case that the tenant has nothing more than a “tenancy at will” which you can terminate at any time (at your will funnily enough) by service of notice.

If that is the case and they don’t leave after you’ve terminated it you can then apply to court for a quick possession order to have them physically evicted.

Again, the facts will dictate whether this is an option for you.

 

How To Evict A Commercial Tenant Without A Lease – Conclusion

As you can see there are several options available to get a commercial tenant out where there is no written lease in place, but the one that is best for you will depend upon the facts.

I deal with issues like these all the time so if you want to evict a commercial tenant without a lease feel free to get in touch.

I’d be happy to discuss it with you.

 

Get In Touch

You can call me now on 020 7842 1452 

Email me at ian@propertydisputes.co.uk 

Or complete a Free Online Enquiry

I’ll then get in touch as soon as I can for a chat about your legal rights and options.

There’s no cost or obligation.