Forfeiture Is Not The Way To Get A Windfall

In two recent cases, the Court of Appeal has looked at the factors to be taken into account when considering whether to grant relief from forfeiture to a tenant who has breached the covenants in its lease. In both cases, the Court of Appeal found that relief should be granted where forfeiture would otherwise result in the landlord gaining a windfall.

Background

The Courts have a discretionary power to grant relief from forfeiture for breaches of covenants other than the non-payment of rent. Although the Courts have historically refused to lay down rigid rules setting out when relief should be granted or not, relief will generally be granted where:

• The tenant remedies the breach or, if the breach cannot be remedied, pays adequate compensation to the landlord, and