Forfeiture

Forfeiture is a landlord’s right, written into some tenancy and lease agreements, to bring the contract to an early end because the tenant has breached its terms. In modern housing law it mostly applies to long leases, for example flats owned on a leasehold basis, rather than ordinary assured or assured shorthold tenancies, where landlords usually rely on statutory possession proceedings instead of “forfeiture”.

A forfeiture clause normally allows the landlord to end the lease if the leaseholder seriously breaches the agreement, such as by failing to pay ground rent or service charges, or carrying out unauthorised alterations. For residential long leases the landlord must usually serve a formal notice under section 146 of the Law of Property Act 1925, setting out the breach and in many cases giving the leaseholder a chance to remedy it. Forfeiture for arrears of service charges or administration charges often requires the debt to be formally determined or admitted first.

If forfeiture goes ahead, the landlord may re-take possession of the property and the leaseholder can lose their home and the value of the lease, although there are routes to apply for relief from forfeiture.