When navigating the complex world of property management, landlords and their managing agents must always remain vigilant, especially when dealing with an absent or reluctant tenant. In such situations, it's crucial to recognise that tenants may resort to creative tactics in an attempt to argue that the landlord has forfeited their lease.
In NPS (40GP) Ltd v Liberty Commodities Ltd, the tenant failed to pay rent and tried to negotiate a surrender of the lease, during which time they voluntarily vacated the premises – specifically on 8 April 2022. Following vacation of the premises, the landlord conducted routine maintenance works – including the deactivation of key cards giving access through the security turnstiles to the common parts of the building. Thereafter, the landlord did not take proactive steps to supply replacement key cards although a tenant’s representative had been given access to the post room of the building on request. At an annual rent of £3.1m per annum, arrears were racking up fast and the tenant then sought to argue that the failure to provide replacement key cards amounted to peaceable re-entry and a forfeiture of the lease. Therefore, that its rental obligations ended on 8 April 2022.
In the judgement handed down on 4 August 2023, the court determined that the landlord’s actions had not amounted to peaceable re-entry. In the judgement, Master Pester stated ‘What is missing… is any plea.. that any employee asked for a new key card and was refused the same’. Where a tenant was not in occupation, mere failure to offer replacement key cards did not amount to forfeiture by peaceable re-entry and the tenant’s liabilities remained beyond 8 April 2022.
While the court’s judgement here was in the landlord's favour, this case offers a prudent example for landlords and managing agents, and indeed building managers, reception and security staff to stay alive to the risk that absent or reluctant tenants may look to exploit legal nuances or misinterpretations to try to argue that the landlord has forfeited.
