The term lease forfeiture is often used to refer to situations that arise with commercial leases. In some countries, a landlord of a commercial property has the right to end a lease if a tenant fails to adhere to the terms of the contract. Typically, landlords exercise the right to a lease forfeiture when a tenant has failed to pay the agreed amount of rent on a commercial property. In some cases, however, a landlord will also exercise his forfeiture rights because the tenant has breached the lease agreement in some other manner. For example, a landlord may want to end a lease because the tenant is engaged in illegal activity on the premises.
The laws that govern lease forfeiture may vary from jurisdiction to jurisdiction. As such, it is wise for landlords and tenants to learn the specific rights and responsibilities they have in their jurisdiction before signing a lease. Some jurisdictions require a particular amount of notice before a landlord can complete a forfeiture, but others do not set a particular notice period. Often, commercial leases contain a forfeiture clause to let tenants know what to expect.
In some places, a landlord has the right to begin a lease forfeiture without going into court first. For example, if a landlord rents a property that is used for business purposes, he may have the right to proceed with a forfeiture for non-payment of rent without seeking a court order. In such a case, the law may allow him to enter the property and change the locks, often with a bailiff's assistance. This differs from spaces that are rented out and used as residences. Many jurisdictions have a different set of laws for dealing with non-payment of rent when a property is used as a residence instead of a business.
Sometimes the breach of a commercial lease has nothing to do with the non-payment of rent. In such case, there may be different procedures for handling a lease forfeiture. For example, a landlord may be required to give the tenant notice of the lease agreement breach and ask him to fix the issue. Landlords are typically required to give tenants a significant amount of time in which to fix the issue as well. If the tenant fails to fix the breach within the allotted time, however, the landlord usually has the right to move on with lease forfeiture procedures.
