What Is Waiver in Forfeiture of Commercial Lease?

When a tenant breaches a commercial lease, a landlord may have the right to bring the lease to an end — this is called forfeiture. But landlords need to tread carefully. Certain actions taken after knowledge of a breach can unintentionally waive the right to forfeit. Therefore, it is always recommended that legal advice is sought.

This short guide explains what waiver is and what it means for landlords and tenants.

1. What Does Waiver Mean?

In simple terms, waiver occurs when a landlord knows about a tenant’s breach but still acts in a way that treats the lease as continuing. If this happens, the landlord may no longer be able to forfeit the lease for that breach.

2. What Types of Landlord Actions Can Cause Waiver?

Whether in fact there has been an act of waiver will depend upon the facts and each case must be considered on its own facts, but the following is a list of examples where waiver may occur:

Accepting rent: Taking rent after knowing about the breach

Demanding rent: Issuing a rent demand can amount to waiver.

Correspondence or other action that recognises the lease as continuing e.g. demanding access pursuant to a clause in the lease.

3. The Three Things Needed for Waiver

For waiver to occur, the courts look for three elements:

1. Knowledge of the breach

2. An unequivocal act that clearly treats the lease as continuing.

3. That the unequivocal act was communicated to the tenant

4. Are All Breaches Treated the Same?

No. There are two types:

1. Once‑and‑for‑all breaches

These happen at a fixed moment—for example, nonpayment of rent on the due date

2. Continuing breaches

These are breaches that renew daily — for example a failure to keep the property in repair.

5. Why Waiver Matters

Whether or not a right to forfeit has been waived will often determine whether the landlord is or was entitled to possession and as a result may or may not have to pay compensation to a tenant ousted from the premises.

Written by David Bowers, Associate Solicitor, Judge & Priestley LLP. 

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