Have you been locked out of your commercial or retail premises?
In New South Wales, a landlord may lock out a tenant for failing to pay rent in accordance with the terms of the lease.
Despite the tenant being in default of the lease and the landlord lawfully taking action to lock out the tenant from the premises (in most instances, by changing the locks), there is a long standing principle in equity, which may come to the aid of a tenant. The court may relieve the tenant if the tenant is willing to remedy the default by paying to the landlord the full amount of the rental and outgoing arrears. This principle is known as relief against forfeiture. In summary, save for exceptional circumstances, a court will likely effectively order the landlord to allow the tenant to re-enter and continue to trade from the premises if the tenant makes payment to the landlord in full. The burden on the landlord in resisting that application for relief against forfeiture is heavy: see Pioneer Quarries (Sydney) Pty Ltd v Permanent Trustee Co of NSW Limited (1970) 2 BPR 9562; Greek Macedonian Club Limited v Pan Macedonian Greek Brotherhood NSW Limited  NSWSC 92. The exceptional circumstances are limited and may include use of the premises for illegal purposes.
While the court may order relief against forfeiture, such an order would not prohibit the landlord from taking future action in respect of subsisting breaches or new breaches of the lease. A systematic failure to pay rent may be one of the factors a court considers to deny relief against forfeiture.
If you are a tenant who has been locked out of your premises, please feel free to contact us. Alternatively, if you are a landlord considering taking action against a tenant who has failed to pay rent, please do not hesitate to contact us.