Forfeiture Proceedings Explained

You may have found yourself involved in forfeiture proceedings with a number of questions about the process, what’s involved, and how it will impact you. Whether you’re being convicted of criminal activity, are a tenant in breach of contract, or a landlord seeking forfeiture, here we set out to explain forfeiture proceedings and how they relate to a forfeiture order.

What is a Forfeiture Order?

In simple terms, a forfeiture order refers to the act of law enforcement seizing financial assets from criminals who have acquired said assets through illegal means, such as:

• Criminal organisations
• Corporate crimes
• Drug dealers
• Terrorists

For instance, if a business was broken into and a getaway car was used, then the car and money obtained from the burglary would be included within the forfeiture order.

A forfeiture order can also apply to a more benign situation where a private or corporate tenant, willingly or unwillingly, has breached their lease contract.

Forfeiture of the Lease

Provided they can demonstrate their right to do so, a landlord or property owner can use lease forfeiture to re-enter their property in the instance of a tenant breach. Generally, during forfeiture proceedings, landlords will refer to a clause in the lease contract which allows them to forfeit in response to particular violations, such as:

• The tenant has made alterations to the property without consent.
• The tenant has received noise complaints.
• The tenant has allowed pets at the property.
• Damages or leaks to the property caused by the tenant.
• The tenant has sublet parts or the whole of the property without consent.

However, before the landlord attempts to regain control of the property by ‘peaceable re-entry’, the practicalities of such actions need to be examined. For example, the landlord needs to consider how realistic it is in their situation that they will be able to change the locks during the day as the property may not be empty. Factors such as this need to be carefully considered as the landlord faces serious risks of committing a criminal offence if individuals and objects are present.

The landlord also reserves the right to forfeit in situations where the tenant has breached a fundamental condition of the lease even if there is no explicit clause for this. However, in cases where the clause is absent, landlords should seek legal counsel before forfeiting to ensure they are not, themselves, breaching the contract.

What are Forfeiture Proceedings?

An alternative to ‘peaceable re-entry’ is to issue forfeiture proceedings using a relevant claim form. Forfeiture proceedings can be either criminal or civil and fall under a number of categories, as per the Proceeds of Crime Act 2002. Within the Proceeds of Crime Act 2002, section 297A states that criminal financial assets can be seized outside of the court, whereas a court order is needed to forfeit assets following section 298.

The process of forfeiture often involves proceedings in the court of law. Civil proceedings occur when the action is against property, as opposed to a person. Whereas, criminal proceedings occur when the action is against a person. If the defendant is found guilty during criminal proceedings, criminal forfeiture allows for their property, money or substitute assets to be confiscated.

The advantage of issuing forfeiture proceedings is that it avoids the difficult nature of re-taking possession of the property. On the other hand, the main disadvantages are that the process can be significantly lengthy and result in additional legal fees.

Relief from Forfeiture

In certain situations, the party in breach might appeal to the court for relief from forfeiture proceedings via an application to the court which may overrule the rights of the landlord to end the lease. This typically happens in lease forfeiture where the judge has to make a decision based on the landlord and tenant’s respective situations.

If the judge rules in favour of the tenant, they will be granted a conditional length of time to remedy their breach and over any incurred damages. Also, the tenant may still be able to remain in the property, even if the landlord has already re-entered the property.

How Does a Confiscation Order Work?

A confiscation order is made in the Crown Court under section 6 of the Proceeds of Crime Act 2002. Unlike a forfeiture order, a confiscation order is similar to a fine whereby the convicted defendant must pay a sum of money by a specific date. Also, unlike a forfeiture order, a confiscation order does not take away any property or major assets from the defendant.

If the police or customs officers suspect that the property is the product of illegal activity, they can seize the value of £1,000 or above in cash. The sum is detainable for a maximum of 48 hours before consulting the Magistrates Court. If the Magistrates Court agrees that the assets have most likely been obtained unlawfully, they can forfeit the cash. In

Civil recovery proceedings, on the other hand, are brought by the National Crime Agency and do not rely on a prior criminal conviction to take place. Please refer to our article to help you with understanding civil forfeiture laws.

How Can We Help?

As forfeiture orders, forfeiture proceedings and criminal forfeiture can be a complex area of law, we recommend taking professional legal advice from our specialists. Contact our team of experienced fraud barristers today.