Use of CRAR will waive a right to forfeit

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Use of CRAR will waive a right to forfeit

Published 5 noviembre 2018

The right to forfeit a lease can be waived by any action by the landlord that shows that the lease continues in full force and effect.

In the case of Saravananthan Thirunavukkrasu v (1) Baljit Singh Brar (2) Jinder Kaur Brar, the landlord elected to use Commercial Rent Arrears Recovery (CRAR) to collect unpaid rent. When the process led to a bounced cheque from the tenant, the landlord decided enough was enough and forfeited the lease.

Unfortunately the landlord did not wait to forfeit until after the next rent day, meaning that the Court held that the act of using CRAR had waived the right to forfeit, and the tenant was able to re-occupy the premises.

The landlord had a run of arguments why the use of CRAR should not have led to the right to forfeit being waived, including a defective CRAR process, an alleged variation to the rent payment dates and that CRAR only waived the right to forfeit for part of the arrears. However the Court was clear that the use of CRAR had waived the right to forfeit.

The message is clear: if you want to consider forfeiting a tenant's lease then tread very carefully in taking any action or communicating with the tenant in a way that might be taken as showing the lease is continuing as this will waive your right to forfeit.

If you have taken steps that might be seen to be waiving your right then it is best to wait until after the next rent day (and any grace period specified in the lease) before forfeiting the lease.

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