How to recover the outstanding rent and get back the property?

V. How to recover the outstanding rent and get back the property?

A tenancy agreement may contain a clause that entitles the landlord to forfeit the tenancy (i.e. to terminate the tenancy and to re-enter the property) if the tenant fails to duly pay rent.

Even if the tenancy document does not contain a forfeiture clause, the law generally implies such a right of forfeiture upon non-payment of rent.

Regarding tenancies of domestic properties that were created on or after 27 December 2002, section 117(3) of the Landlord and Tenant (Consolidation) Ordinance implies in such tenancies a covenant on the part of the tenant to pay the rent on the due date and a condition for forfeiture if that covenant is broken by virtue of non-payment of rent within 15 days of the due date.

Regarding tenancies of non-domestic properties, section 126 of the Landlord and Tenant (Consolidation) Ordinance provides that in the absence of any express covenant for the payment of rent and condition for forfeiture, there will be implied in every tenancy a covenant to pay the rent on the due date and a condition for forfeiture for non-payment within 15 days of that date.

Therefore, in general, if a tenant is late in paying the rent for 15 days, the landlord is entitled to terminate the tenancy and obtain an order for possession from the Court (including the Lands Tribunal) to recover vacant possession of the property.

However, if the non-payment takes place for the first time during the course of a tenancy, the tenant who wishes to “save” the tenancy has a right to do so by paying all of the outstanding rent and the landlord’s legal costs in arrears at a specified time granted by the Court before the landlord could take possession of the property by the Court order. This is commonly known as “relief against forfeiture”.