Forfeiture

Forfeiture is a landlord's right, set out in a forfeiture clause within a lease agreement, to bring the lease to an end before its term expires because the tenant has breached its terms. In English property law, the right is governed principally by section 146 of the Law of Property Act 1925 and, for residential long leases, by additional protections in the Commonhold and Leasehold Reform Act 2002. Forfeiture applies to long leasehold interests, typically flats bought on 99 or 125-year leases, rather than to ordinary assured periodic tenancies, where possession is obtained through statutory notice and court proceedings instead.

When the right to forfeit arises

A landlord can only exercise a right to forfeit if the lease contains an express forfeiture clause, sometimes called a proviso for re-entry, permitting it. Without such a clause, forfeiture is not available regardless of the severity of the breach. Common triggers include failure to pay ground rent or service charges, carrying out unauthorised alterations, subletting without consent, or insolvency events specified in the lease.

A landlord who becomes aware of a breach must act promptly. Any conduct that treats the lease as continuing, most commonly, demanding or accepting rent after knowing of the breach, constitutes waiver and extinguishes the right to forfeit for that particular breach. Where the breach is a continuing one, such as failure to keep the property in repair, a fresh right to forfeit arises each day the breach persists, so waiver of one occasion does not permanently bar the landlord. Where the breach is a once-and-for-all event, such as an unauthorised assignment, waiver permanently removes the right to forfeit for it.

The section 146 notice requirement

For all breaches other than non-payment of rent, a landlord must serve a notice under section 146 of the Law of Property Act 1925 before forfeiting. The notice must specify the breach, require the leaseholder to remedy it where it is capable of remedy, and require the leaseholder to pay compensation for any loss. The leaseholder must be given a reasonable time to remedy the breach before the landlord proceeds.

For residential long leases, section 168 of the Commonhold and Leasehold Reform Act 2002 imposes a further requirement: a section 146 notice cannot be served for breaches other than non-payment of rent unless the breach has been admitted by the leaseholder or formally determined by a court or the First-tier Tribunal (Property Chamber). Even after a determination, the landlord must wait at least 14 days before serving the notice. For service charge or administration charge arrears specifically, forfeiture cannot be pursued unless the total amount outstanding exceeds £350 or includes any sum that has been outstanding for more than three years.

Non-payment of rent is treated differently: a section 146 notice is not required, and the landlord may proceed to forfeit in accordance with the terms of the lease once the rent has remained unpaid for the period specified in the forfeiture clause, typically 14 or 21 days.

How forfeiture is effected

There are two methods by which a landlord may bring about forfeiture once the right has arisen and any required notices have been served.

The first is peaceable re-entry. The landlord physically enters the property and changes the locks, with no court order required. This is faster and cheaper than court proceedings and is commonly used for commercial premises where the tenant has vacated. However, section 2 of the Protection from Eviction Act 1977 makes peaceable re-entry unlawful where any person is lawfully residing in the premises. For occupied residential property, including a flat held on a long lease, court proceedings are therefore always required. Attempting peaceable re-entry in an occupied residential property exposes the landlord to claims for trespass and damages.

The second method is issuing court proceedings for possession. The lease ends when the proceedings are served, but possession is not obtained until the court grants a judgment. The period between service and judgment is sometimes called the twilight period, during which the landlord cannot demand rent but may claim mesne profits.

Relief from forfeiture

Courts have a wide discretion to grant relief from forfeiture, and they exercise it readily where the breach has been or can be remedied. For non-payment of rent, a leaseholder who pays all arrears plus interest and the landlord's costs before or shortly after a possession order is typically entitled to relief as of right. For other breaches, relief depends on the circumstances, but courts consider the severity of the breach, the conduct of both parties, and whether the landlord has suffered lasting prejudice. Sub-tenants and mortgagees also have independent rights to apply for relief, as their interests fall away automatically when the head lease is forfeited.

A leaseholder facing a section 146 notice or threatened forfeiture should take legal advice immediately, courts grant relief readily where the breach can be remedied, and delay in applying can prejudice the outcome. Landlords who hold long leasehold interests can store lease documents, service charge schedules, and formal notices in August's document management feature, keeping the evidence trail that any forfeiture or relief application requires.

Statutory context

The primary legislation is section 146 of the Law of Property Act 1925, which governs the notice requirement for non-rent breaches. Sections 168 and 169 of the Commonhold and Leasehold Reform Act 2002 impose the additional determination requirement for residential long leases. Section 2 of the Protection from Eviction Act 1977 prohibits peaceable re-entry in occupied residential premises. The LEASE advisory service publishes accessible guidance on the forfeiture process for residential leaseholders. Looking ahead, the draft Commonhold and Leasehold Reform Bill 2026, proposes to abolish forfeiture as a remedy against residential long leaseholders and replace it with a fairer, more proportionate regime. It remains in draft and is not yet law.

Unlike foreclosure, which relates to mortgage enforcement by a lender, forfeiture is a contractual right exercised by a freeholder or superior landlord against a leaseholder. The two concepts are sometimes confused but arise from entirely different legal frameworks.

Frequently asked questions

Does forfeiture apply to ordinary rented properties? 

No. Forfeiture applies to long leasehold interests, typically flats sold on leases of 21 years or more where a capital premium was paid. Landlords seeking possession from assured periodic tenancy holders must use the statutory grounds for possession under Section 8 of the Housing Act 1988. Forfeiture clauses in ordinary short-term tenancy agreements are generally unenforceable against residential tenants.

Can a landlord forfeit a residential flat for unpaid service charges? 

Yes, but the threshold conditions must be met. The total arrears must exceed £350 or include a sum that has been outstanding for more than three years. The breach must also have been admitted by the leaseholder or formally determined by a court or the First-tier Tribunal before a section 146 notice can be served. These requirements exist specifically to prevent forfeiture being used as a disproportionate remedy for small or disputed debts.

What happens if a landlord accepts rent after a breach? 

Accepting rent with knowledge of a breach waives the right to forfeit for that breach. It signals to the court that the landlord has treated the lease as continuing. Landlords who are considering forfeiture should stop demanding and accepting rent as soon as they become aware of the breach. For continuing breaches, such as a persistent failure to repair, a fresh right to forfeit arises each day, so waiver of one period does not bar later action.

What is the difference between forfeiture and peaceable re-entry? 

Peaceable re-entry is one of the two methods of effecting forfeiture, the landlord physically re-enters and changes the locks without a court order. It is permitted for commercial premises where no one is in residence but is unlawful in any property where a person is lawfully residing, making it unavailable in practice for occupied residential long leases. Court proceedings are the required route for residential forfeiture.