You may have found yourself involved in asset forfeiture 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 asset forfeiture, our blog post sets out to explain asset forfeiture proceedings and how they relate to a forfeiture order.
What does Forfeiture Mean in Legal terms?
So, what actually is asset forfeiture? In simple terms, asset forfeiture refers to the act of law enforcement seizing financial assets from criminals who have acquired said assets through illegal means, typically criminal organisations, corporate crimes, drug dealers and terrorists. However, asset forfeiture can also apply to a more benign situation where a private or corporate tenant, willingly or unwillingly, has breached their lease contract. The practise of asset forfeiture harks back to the days where British admirals would seize vessels and smuggled goods to pay for damages in an attempt to protect themselves against and deter acts of piracy.
What are Asset Forfeiture Proceedings?
Asset forfeiture proceedings fall under a number of categories, as per the Proceeds of Crime Act 2001:
A confiscation order is made in the Crown Court, whereby the convicted defendant must pay the state by a specific date.
Cash forfeiture proceedings
If the police or customs officers suspect that property is the product of illegal activity, they can seize the value of £1000 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
Civil recovery proceedings
These are brought by the National Crime Agency and do not rely on a prior criminal conviction to take place.
What Does Forfeiture of the Lease Mean?
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 – this terminates the lease. Generally, landlords will refer to a clause in the lease contract, which allows them to forfeit in response to particular violations. 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 is Relief from Forfeiture?
In certain situations, the party in breach might appeal to the court for relief from forfeiture. 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 are granted a conditional length of time to remedy their breach and cover any incurred damages.