Relief from forfeiture involves the right of the courts to set aside a landlord termination of the lease and may allow the tenant to be reinstated to a leased premise. It is become an established practice of the Calgary commercial leasing scene.
When a tenant breaches a lease the result is that they may end up forfeiting their right to further using and occupying the leased premises. But, there are instances that the courts have discretionary power to provide relief from forfeiture under section 24 of the Law and Equity Act. The requirement must be to show that relief is considered fair and just in some circumstances.
The courts, from decisions rendered, will consider following 3 factors and possibly others when rendering a decision as each situation may have different elements.
These factors include:
• The conduct of the developer, and whether it had “clean hands”
• The gravity of the breaches, and
• The disparity between the value of the property forfeited and the damage caused by the breach.
In some instances the court decision may conclude that neither the developer’s conduct nor nature of the breaches, disentitled it to an equitable remedy.
Should a court provide relief from forfeiture, the court can impose certain terms including costs, expenses, damages, compensation against a tenant who is granted relief from forfeiture despite its success.
Both tenants and landlords should keep in mind that even if the pertinent factors are satisfied, relief from forfeiture may not necessarily be available.
Even if a landlord can successfully terminate a lease for cause and evicts the tenant, a tenant can apply for a court order essentially reversing the eviction. Relief from forfeiture is a remedy which is discretionary and may be granted after considering the conduct of the parties and the applicable circumstances, and if the court considers it just and reasonable.
