Waiver of the right to forfeit requires the landlord to know of the breach and to act unequivocally to confirm the existence of the lease. Relief from forfeiture is in the discretion of the court.
The High Court has considered forfeiture issues in The Tropical Zoo Ltd v The Mayor and Burgesses of The London Borough of Hounslow [2024] EWHC 1240 (Ch).
The case concerned a long lease of approximately 25 acres of green belt land near Heathrow airport granted by the defendant council (LBH) to the claimant (TZL) in March 2012 for use as a centre for education, conservation and leisure, including a tropical zoo visitor attraction and associated facilities.
The lease included covenants requiring TZL to construct a zoo building and education centre within two years of the grant of the lease.
While TZL had run Hounslow Urban Farm on the site with a large collection of animals it had not constructed the zoo or even commenced it due to difficulties securing funding.
In late January 2020 TZL entered into an option permitting a subsidiary of Canmoor, a property development company, whose own offers to buy the land from LBH had been rejected, to purchase its entire shareholding.
Canmoor, intended to use parts of the site for the airport business park proposed by LBH, a use not permitted under the lease.
In November 2020 LBH served notice under clause 9 of the lease, a variant on a Jervis v Harris clause, requiring TZL to remedy its failure to construct the zoo building within two months, failing which LBH could enter to remedy it and recover the sums spent as a debt.
TZL failed to comply and subsequently LBH served a section 146 notice indicating its intention to re-enter the premises if the breaches were not remedied within a reasonable time.
LBH gave strict instructions to its agents not to demand or accept rent for two years but TZL continued to pay rent. The payments were returned promptly save for payments in March 2021 and in September 2022.
TZL argued that LBH had waived its right to forfeit and, in proceedings funded by Canmoor, sought a declaration as to the position and alternatively, relief from forfeiture.
LBH conceded that its acceptance of rent after 2014 had waived its right of forfeiture in respect of TZL’s failure to construct the zoo building by March 2014.
Instead, it relied on TZL’s failure to comply with the clause 9 lease notice as a separate and freestanding breach giving rise to a separate right of forfeiture. The court agreed.
As for waiver the court found that LBH’s agents had no authority to make decisions on their behalf about the lease and the delay in returning the payments of March 2021 and September 2022 did not constitute waiver.
The court considered it inappropriate to grant relief from forfeiture which would protect Canmoor’s bargaining position in negotiations with LBH for development rights over the site.
Louise Clark is a property law consultant and mediator
