Operating a business from leased commercial premises can often lead to disputes with your landlord (lessor). Given the importance of location and long-term lease security to a business’s value, resolving lease disputes is critical. One potential legal remedy available to lessees (tenants) in such situations is relief against forfeiture.

This legal mechanism can protect your right to occupy leased premises when disputes arise, whether due to missed rent payments, breaches of lease terms, or challenges related to lease renewal.

Common Grounds for Relief Against Forfeiture

1. Missed Rent Payments

The most frequent cause of forfeiture is non-payment of rent. Economic fluctuations, unexpected downturns, or cash flow issues can hinder a lessee’s ability to meet rent obligations. Relief against forfeiture provides an opportunity for tenants to rectify their financial situation and retain occupancy, avoiding significant disruptions to their business.

2. Unauthorized Alterations or Modifications

Sometimes, tenants make changes to leased premises without obtaining the necessary consent from the landlord. These changes, even if well-intentioned, can breach lease agreements. Relief against forfeiture allows tenants to negotiate a resolution, such as restoring the property to its original condition or reaching an agreement with the landlord.

3. Improper Use of Premises

If the premises are used for unauthorized purposes or unlawful activities, landlords may seek forfeiture. In such cases, tenants can apply for relief to resolve the issue and potentially continue their lease.

4. Failure to Give Timely Notice for Lease Renewal

Under the Property Law Act 2007, tenants who miss the deadline to renew a lease may seek relief against forfeiture. Courts consider several factors, including:

• Reasons for the missed notice.
• The lessee’s overall conduct.
• Prejudice to both parties.
• The landlord’s motivation for refusal.
• Interests of third parties.

Alternatives to Court Action

Before pursuing legal remedies, alternative dispute resolution methods such as mediation or arbitration may provide quicker and more cost-effective solutions. These options often help resolve disputes amicably without the need for lengthy court proceedings.

Key Takeaways for Lessees

To avoid disputes, lessees should implement robust scheduling systems to track critical dates, such as notice periods for lease renewals. If issues arise that put your lease at risk, Core Legal Wellington can provide expert guidance tailored to your situation.

Whether you face challenges with missed payments, lease breaches, or renewal disputes, our team has the expertise to protect your interests. Contact us today to discuss your options and ensure your business remains secure.