Successfully claiming back rental income and forfeiting a residential property lease

Our client purchased a newly built leasehold residential property from a developer. The purchase came with a guaranteed buy and rent-back scheme, making him a landlord and a long leaseholder.

The developer/tenant (“Developer”) agreed to pay our client a premium rent, renting the property to a sub-tenant.

Upon completion of the property, the Developer failed to pay any rent, and our client discovered that the property was never occupied and/or rented.

Our client sought legal help to recover the outstanding rent and regain possession of the property.

The matter is seemingly straightforward as the lease includes an express term allowing the landlord to forfeit the lease by re-entering the property for any outstanding rent.

However, in practice, there are very limited circumstances where a landlord can forfeit a residential lease by peaceful entry, even with proof of non-occupation. A criminal offence may be committed by wrongful re-entry to a residential property.

How we helped our client

Multiple complications arose as:

(i) The payment term under the lease was agreed on rather unconventional conditions; and

(ii) Our client’s direct dealing with the Developer and their designated management company could potentially waive his right to forfeit the lease.

We advise our client that a court order for possession of the property is necessary.

Most importantly, in the absence of important wording in our client’s lease, we assisted him in sending a carefully drafted demand letter to the Developer in a well-designated timeline, securing his right to forfeit.

We received a court hearing date within two months of filing the claim. Apart from recovery of possession of the property, we assisted our client in claiming the arrears of rent and any mesne profit/damages for the use and occupation of the property at a daily rate with interest.

Whilst the case came up for hearing, the Developer, who was also the defendant in the claim approached us. We successfully negotiated with the Developer and assisted our client in entering into a consent order with a deed of surrender. The case was adjourned upon finalisation of the consent order.

Outcome

Unfortunately, the matter did not end just yet. The Developer reneges in complying with the terms of the consent order. On the 2^nd hearing date, a judgment in default was entered against the Developer for the terms agreed. We advise our client to explore the options of executing the judgment which could potentially pressure the Developer to settle the judgment sum.

The Developer, upon receiving the judgment made against them, has settled the full sum, thereby bringing the case to an end.

We pride ourselves on the ability to pursue a matter litigiously. However, our primary aim is always to settle the matter out of court, aiming to resolve the dispute amicably. In this matter, we spent a tremendous amount of time negotiating with the opponent patiently, a strategy which we believe had achieved an efficient, cost-saving and favourable resolution for our client.

Image by Tumisu from Pixabay