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Forfeiture: High Court grants relief after 14 months

Landlords and agents may have to look again at whether 6 months is sufficient time to allow the tenant to apply for relief, before exercising peaceable re-entry.

In Pineport Ltd v Grangeglen Ltd [2016] EWHC 1318 (CH) the High Court awarded relief despite the claim for relief being made 14 months after re-entry was carried out.

The tenant paid a premium of £90,000 for a lease in 1998, with a ground rent of £100 per annum. At the time of re-entry, the lease was worth between £275,000 and £300,000. The landlord re-entered the property in April 2014, with the tenant owing £2,155 in rent, which amounted to less than 1% of the value of the lease. It was not until June 2015 that the tenant applied for relief to the High Court; the tenant’s sole director citing personal mitigating circumstances for the delay, including, depression, a freezing order, and imprisonment.

Applications for relief brought in the County Court must be made within 6 months of the forfeiture (Sections 138 and 139 County Court Act 1984), whereas applications for relief brought in the High Court can be brought at any time. The law provides that only in exceptional circumstances should proceedings be brought in the High Court.

In Pineport, the High Court decided that a 14 month delay was close to the edges of "reasonable promptitude", but that such a delay was insufficient to justify barring relief. The Court was swayed by the substantial premium paid for the lease, and the “severe disproportion” between the windfall which the landlord would receive in the value of the lease, and the sum which was in fact due to the landlord. The persuasive explanations for the delay in seeking relief were also influential in the decision, given that they rendered it far more difficult for an application to be made any earlier.

On its face, this decision would appear to cast doubt on the 6 month yard stick used by landlords and agents to judge whether re-letting can take place without fear of relief from forfeiture being granted. However, it is important to note the exceptional reasons for the delay in this case, as well as the judge's admission that "there may well be different considerations in relation to a lease at a rack rent."


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