A Guide To Forfeiture

Forfeiture, also known as the right to re‑enter, is often viewed as a severe or “draconian” remedy.

Despite this, it is a standard clause found in almost every lease, whether commercial or residential. When used correctly, forfeiture allows a landlord to regain possession of their property following a breach of the lease by the tenant.

This guide explains how forfeiture works, the legal requirements involved, and the common pitfalls landlords and tenants should be aware of.

What Is Forfeiture?

Forfeiture is a legal remedy that enables a landlord to:

• Peaceably re‑enter the property, or
• Apply to the court for possession

…when a tenant has breached the terms of their lease.

Not all breaches allow forfeiture. The lease must specifically reserve the right to forfeit for the breach in question. Common examples include:

• Non‑payment of rent
• Non‑payment of service charges or other sums reserved as rent
• Breach of repair obligations (more common in commercial leases)

While most landlords hope never to rely on forfeiture, it is crucial to follow the correct legal process from the outset if the remedy becomes necessary.

Serving a Section 146 Notice

Except in cases of non‑payment of rent, a landlord must serve a Section 146 Notice under the Law of Property Act 1925 before taking steps to forfeit the lease.

The notice must:

• Specify the breach
• Allow reasonable time for the tenant to remedy the breach (if capable of remedy)
• Be served correctly

Many landlords choose to serve a Section 146 notice even for rent arrears as a “belt and braces” approach.

Where Should the Notice Be Served?

The notice must be served at the tenant’s:

• Service address (as stated in the lease), or
• Usual or last known residence

This can be straightforward for residential tenants, but more complex for:

• Individuals renting commercial premises
• Companies that have vacated without formally ending the lease

Case law—particularly Relfo Ltd (in Liquidation) v Varsani [2009]—makes clear that landlords must take reasonable steps to identify the tenant’s actual residence. You cannot rely on assumptions; evidence is required.

If reasonable steps have been taken but the tenant cannot be located, the notice may be served at the last known residence even if you know they are no longer there.

Alternative Service Methods

If there is any doubt, landlords may apply under CPR 6.15 for permission to serve the notice by an alternative method. This can help prevent future challenges from tenants claiming invalid service.

Avoiding Waiver of the Breach

Once a Section 146 notice has been validly served, landlords must be extremely careful not to waive the breach.

A waiver occurs when:

• The landlord has knowledge of the breach, and
• Performs a positive act acknowledging the lease as continuing

Examples include:

• Demanding rent
• Accepting rent
• Communicating with the tenant in a way that treats the lease as ongoing

Knowledge held by employees can be imputed to the landlord. Importantly, waiver is irrevocable, even if unintentional.

How Wilson Browne Solicitors Can Help

Forfeiture is a technical and often contentious area of law. Whether you are:

• A landlord dealing with a difficult tenant, or
• A tenant concerned that your landlord may seek to terminate your lease

…our specialist Commercial Property and Commercial Litigation teams can provide clear, practical advice tailored to your situation.

Frequently Asked Questions (FAQs)