The effect of forfeiture on lease covenants and break rights

A contractual right to terminate the lease cannot be invoked once the landlord has elected to forfeit the lease by peaceable re-entry or by serving a writ on the tenant.

In Prime Aspect v Chan Wan Hung ([2011] HKEC 391, LT) a landlord served a writ of summons on the tenant seeking possession on the basis of the tenant’s failure to pay the rent. The landlord then served a notice on the tenant purporting to exercise a break clause contained in the lease. The Lands Tribunal noted the line of authority that precluded the landlord from obtaining a remedy for any breach occurring after the landlord has elected to forfeit the lease. It held that this reasoning also prevented the landlord from invoking a contractual right to terminate the lease once he has elected to forfeit. Indeed, the landlord cannot rely on any covenant in the lease after electing to forfeit.

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