Don’t let waiver Faiz you!
The case of Faiz & Ors v Burnley Borough Council is a reminder to landlords to remain vigilant as to who is in occupation of premises and from whom they are demanding and accepting rental payments. It also provides useful commentary on waiver in the context of forfeiture.
The tenant and purported sub tenant of a café sought a declaration from the Court that the Council landlord (who had forfeited the lease on the grounds of the tenant's grant of an unlawful sub-tenancy) had waived the right to forfeit the lease by demanding and accepting rent with the knowledge of the breach. If the Court found in their favour, the sub-tenant might be able to remain in occupation with the benefit of security of tenure as the sub-lease (unlike the lease) had not been contracted out of the Landlord and Tenant Act 1954. This was an outcome the Council was keen to avoid as it would severely impede its flexibility in relation to the operation of the café which formed part of Towneley Hall, an historic country house in Lancashire.
Forfeiture is a powerful tool in the landlord's armory. However, it is a long-established principle that the right to forfeit can be waived by a landlord. This occurs when, with full knowledge of the facts upon which its rights have arisen, the landlord acts in a way which is consistent only with the continuation of the lease. This action must be communicated to the tenant. The most common example of an act that can constitute waiver is a demand for rent or other sums under the lease.