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Forfeiture is the legal process by which a landlord lawfully terminates a commercial lease and repossesses the property, typically due to a fundamental breach by the tenant. This differs from residential leases, which are subject to different rules.
The starting point before considering forfeiting should be checking the terms of the lease to check whether there are express rights for you to forfeit. If not, see how to proceed below. It's always important as Landlord to consider whether forfeiture is the best option for you (see below) as there are pros and cons.
Our property litigation team advises landlords and tenants on lease breaches, forfeiture, and relief from forfeiture, ensuring the approach is legally sound, commercially practical, and tactically effective.
Most commercial leases include a forfeiture or re-entry clause, allowing a landlord to terminate the lease if the tenant fails to pay rent or breaches other covenants, such as:
Repairing obligations
User restrictions
Alienation provisions (subletting or assignment restrictions)
A landlord cannot forfeit a lease unless such a clause exists. Where a right to forfeit exists, there are two main scenarios:
Peaceable Re-entry for Non-Payment of Rent - the landlord or their agent may enter the property and change the locks when unoccupied. Entry must be non-violent and ideally documented and witnessed to avoid disputes. This method is quick but risky if the forfeiture is later found unlawful — potential claims for trespass or wrongful forfeiture may arise.
Court Proceedings for Other Breaches - for serious breaches other than rent arrears, forfeiture must be pursued through the courts under the Civil Procedure Rules. The process starts with the landlord serving a Section 146 notice under the Law of Property Act 1925, specifying the breach, requiring remedy, and allowing a reasonable time to comply. If the tenant fails to remedy, the landlord may issue a claim for possession.
The risk associated with peaceable re-entry without a court order is that the tenant will apply to the court for relief from forfeiture. The basis of an application for relief for forfeiture is usually :-
Disputing the breach of lease and potentially, in the case of non-payment of rent, arguing either waiver or the right of set off (most leases will prohibit such rights for tenants though) and/or
The tenant taking steps to reduce rent arrears and/or
The tenant agreeing to remedy any other breach of lease covenants.
Generally, tenants must apply for relief quickly after forfeiture, for both practical and legal reasons, since delay will often mean significant damage to the tenant’s business and delay is generally inconsistent with having good grounds to reverse the forfeiture.
When repossessing, landlords become involuntary bailees of tenant goods:
· Take inventory and photos, store safely
· Serve notice for collection, allowing a reasonable time (typically 14–21 days)
· If uncollected, the landlord may sell or dispose of items, deducting costs and holding any surplus for the tenant
As a landlord, when you don’t receive rent or the tenant commits a breach such as unlawful sub-letting or altering the premises, it’s understandable to want the tenant out immediately. However, replacing 1 problem with another problem and/or losing more money isn’t a good choice either. Things to carefully weigh up as Landlord usually include :-
Market conditions – how easy would it be to re-let the premises and on what potential terms? What are the costs to you if the property remains vacant?
How much money are you owed? - Can you recover any sums you are owed without forfeiting now? Are there lease guarantors or a deposit available?
The tenant’s history – if the tenant has historically been a decent tenant, what is the cause of them defaulting or breaching the lease? A conversation might well lead to the possibility of finding a solution which is preferable to forfeiting.
Is surrender of the lease an alternative? - rather than incur legal costs and the possibility of an application for relief from forfeiture, will it be quicker and easier for the tenant to surrender the lease?
financial situation of the tenant - this can be relevant in a number of ways such as the risk associated with what to do with equipment, stock or fittings in the property after re-entry and the likelihood or not of the tenant applying for relief from forfeiture
Security of the premises after forfeiture – what are the risks and costs implications? Will you need to secure the premises?
Practical tips for Landlords
Check the lease - ensure an express right to forfeit exists
Send written notices - record delivery to all relevant addresses
Use all contact methods - email, phone, emergency contacts
Keep records - a detailed log of communications and actions
Engage specialist solicitors -ensure legal, commercial, and tactical considerations are managed
Get in touch
If you would like to speak with a member of the team you can contact us on:
