A guide to possession orders for commercial property

Being a commercial landlord can be a very lucrative business when rents are paid on time and property values increase. Unfortunately, it can also have its fair share of challenges. One of those that many commercial landlords approach us about is what to do when your tenant is refusing to leave.

It may be the case you want to relet your commercial premises to another tenant at a higher rate. Or you could be looking to sell and need vacant possession. Either way, the issue is time sensitive, so it is best to act soon.

In this article, our experienced commercial property dispute solicitors explore what steps you can take to legally remove a tenant from your commercial property to regain possession.

Can I apply for a possession order?

Possession orders through the court are typically used if you need to regain physical control of your property. This may be for a number of reasons, but usually they are used in the following situations:

• where the tenant is persistently breaching the terms of the lease
• the tenant is refusing to leave when the lease has expired
• to evict trespassers or those ‘squatting’ on your commercial premises

Is a possession order the right route for me?

Before applying for a possession order, it may be worth exploring other options which include:

Negotiations or mediation

Possession proceedings, as with any court litigation, can be time-consuming, stressful, and expensive. Depending on your relationship with the tenant and their overall willingness to engage or respond to any attempts, taking part in negotiations or using mediation may be a more cost-effective and quicker way to resolve matters.

Peaceable re-entry

This is a legal mechanism founded in the lease and one of the routes of forfeiture (the other being through applying for a possession order). It involves re-entering the property, changing the locks and securing the property. Forfeiting a lease by peaceable entry is the quickest way to recover your property. That said, it can be risky  - using excessive force or violence when someone is blocking access or resisting can result in landlords committing a criminal offence. It is appropriate where you are confident that the property is empty.

Recovering rent

Another scenario to consider is if your tenant has failed to maintain rental payments. It might be more appropriate to pursue any guarantor, draw down on rent deposits, or invoke the commercial rent arrears recovery process (CRAR) rather than go straight for possession. This might be the case if, for example if your tenant is going through a rough patch, you want to maintain the relationship and/or market conditions mean that it would be difficult to relet the property.

Following proper procedures

You must follow any procedures outlined in your lease to avoid being in breach yourself or jeopardising any subsequent court proceedings. For example, if your tenant is in breach of the terms of the lease, other than for non-payment of rent, you must first serve a section 146 notice on the tenant. You must give them a reasonable time to respond and rectify the breach (if capable of remedy), before applying to the court for a possession order.

You should instruct a commercial property disputes solicitor first before taking any action. We can also help you understand if a possession order is needed or if another option is more suitable.

What documents do I need to provide when applying for a possession order?

It is important to get your documents in order before applying for a possession order. It can help strengthen your case and speed up the process of recovery. This includes:

• a copy of the lease agreement and any rent security deed
• proof of ownership/title to the premises
• any notices served in accordance with the terms of the lease and proof of service
• evidence of the breach (eg rent arrears, continued occupation of the property)
• any relevant correspondence or communication between you and the tenant

How long does it take to get a possession order?

The timeframe for obtaining possession can vary depending on several factors, but generally, the process can take as little as six weeks in straightforward cases to several months for more complicated claims. Once you file a claim for possession, you can usually expect a court hearing to be scheduled within four to eight weeks, depending on the court's schedule and backlog.

If the tenant does not contest the claim, the process tends to be quicker. If the tenant files a defence or counterclaim, this can extend the court timeline and involve additional hearings. Be aware that some tenants may intentionally miss court hearings or respond late to claims, which can further delay the process.

Commercial landlords should keep the following in mind to help the process:

• Apply early: given the potential for delays, it's essential to apply for a possession order at the earliest opportunity, especially if the tenant’s continued occupation is significantly affecting your cash flow.
• Prepare documents: having the necessary documentation to hand strengthens your case and can help speed up the process.
• Be open: if the tenant is willing to negotiate during the process, this might lead to a quicker resolution and avoid the cost of litigation.

• Get legal advice: using the help of an experienced solicitor to prepare the claim and navigate the court process can help avoid costly delays due to claim errors.

How much does it cost to obtain a possession order?

The overall cost of obtaining a possession order can vary case to case. An approximate breakdown of the costs you might incur includes:

• Court fees: the standard fee for filing a possession claim in the county court is £391. An application to the High Court costs significantly more (£900).

• Warrant: If you obtain the order and your tenant is still refusing to leave the premises, it costs £143 to issue a warrant of possession so that bailiffs can enforce the eviction.

• Legal representation: solicitor fees vary depending on whether the application is contested with it varying from a few hundred pounds to a few thousand pounds depending on your circumstances.  

When you factor in the loss of any rental income, or repairing a property left in bad condition, the overall costs can become significant. If the tenant has acted unreasonably, the judge may order that they pay some of your legal costs. If you are unable to budget for these expenses, it may be worthwhile exploring alternative options. This could include steps such as negotiating payment plans with the tenant in the cases of rent arrears, using meditation services, or even renegotiating the terms of the lease to something manageable.

How do I apply for a possession order?

It is important to comply with any pre-action protocols or procedures set out under the terms of your lease before issuing possession proceedings. This includes serving any prescribed notices to the tenant, and waiting until any time period specified within the notice has lapsed before taking action.

Making the court application

Once the time period for any notices served has expired (and presuming the tenant has failed to respond or vacate) you can then make an application to the court for the possession order. This is usually done by completing a claim form, with any supporting information and evidence, filing it at your local county court with the requisite fee, and effecting proper service on the tenant.

Accelerated or standard possession

There are two routes to claiming a possession order: the standard procedure or accelerated possession. As the name suggests, accelerated claims for possession are much quicker than a standard procedure, around 4-6 weeks from submitting the claim. It usually involves the judge making a decision ‘on paper’ without the need for a hearing.

Accelerated possession is typically associated with residential tenancies. It only works where the tenant is not disputing the claim, and it cannot be used in conjunction with claiming rent arrears or for other property damage. It is most commonly used in straightforward cases, for example where the lease term has expired but the tenant isn’t leaving the property.

If you take all the right steps at the right time, getting a possession order for your commercial property can be relatively straightforward. Overlooking the rules surrounding possession proceedings, missing any deadlines, or even simple errors in paperwork is often what causes issues. Fortunately, this is where an experienced property dispute lawyer who is familiar with the process can help. This includes:

• reviewing the terms of your lease and identifying any relevant clauses applicable to your situation
• preparing any notices with all the necessary information
• ensuring any notices or orders are served correctly on the tenant, which includes addressing it to the correct entity or parties, address for service, as well as method of delivery
• monitoring and helping you comply with any directions set by the court

Enforcing a possession order

Once you have been granted the possession order by the court, you are close to the finish line, but not quite yet. The order will specify a date the tenant must vacate the premises. You must serve this on the tenant properly. If the tenant then does not leave by the specified date (and sadly plenty don’t), you need to apply to the court for a warrant / writ of possession.

As mentioned above, the cost of issuing a writ or warrant of possession is a further £143. Once in hand, county court bailiffs or High Court Enforcement Officers can physically remove the tenant from your premises if they refuse to leave.

Summary

As a commercial landlord, managing cashflow and maintaining the state of your property is key to your investment. When it becomes necessary to evict a tenant and regain possession of your premises, this is usually because something has gone very wrong. Acting quickly, getting your papers in order, and enlisting the help of an experienced solicitor can make all the difference. If you are a commercial landlord looking to apply for a possession order, get in touch with our skilled property dispute team at Harper James today. We have helped numerous commercial landlords recover their premises from difficult tenants, including those who simply refuse to vacate after the lease expires.