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As a freeholder or managing agent forfeiting the lease is the final option in the collection of outstanding debts, but can be a valuable weapon as a freeholder or managing agent.
When a property is mortgaged, you will usually find that the mortgagee will pay off the lessee’s debts and then recover it from the lessee directly by adding it to the term of their mortgage. This guarantees that as a freeholder or managing agent you do not have any outstanding debts. But, as a last resort, you may have to forfeit the lease and repossess the property.
When to instruct your inspection
If you do decide to enforce a forfeiture of the lease you should take legal advice beforehand. Once the process has been started and you are in possession of the property, for however short a time period, you should take the chance to instruct a surveyor to inspect it. This can also be a valuable opportunity to check for unauthorised alterations, management issues or possible development opportunities – all of which could add value to your portfolio.