Quick Answers
Can a freeholder still forfeit a residential lease?
Yes — forfeiture of a long residential lease remains legally available for serious or persistent breaches of covenant. But it is not a straightforward tool. The process is procedurally complex, courts grant relief from forfeiture routinely in residential cases, and the 2024 Act added further restrictions on using forfeiture for service charge and ground rent breaches.
Is a Section 146 notice required before forfeiture?
Yes, for all breaches except non-payment of rent. A Section 146 notice must be served on the leaseholder before proceedings are issued, specifying the breach, requiring it to be remedied (if remediable), and requesting compensation. For service charge breaches, the Commonhold and Leasehold Reform Act 2002 imposes additional prerequisites that must be satisfied first.
Will a court actually grant forfeiture of a residential lease?
Rarely without first offering relief. Courts treat forfeiture of a long residential lease as a remedy of last resort. Where the leaseholder remedies the breach and pays the landlord's costs, relief from forfeiture is routinely granted. Actual forfeiture — with the leaseholder losing the lease entirely — is uncommon and reserved for the most extreme cases of persistent non-compliance.
The short answer: forfeiture of a long residential lease is legally available, procedurally complex, and in practice courts almost always grant the leaseholder relief. The direction of reform for 20 years has been to restrict forfeiture further — the 2024 Act continued that trend. The government has stated its intention to abolish forfeiture for residential leases entirely in future legislation, though that abolition is not yet enacted.
The practical reality for RTM directors: forfeiture is rarely the right tool for enforcing against difficult leaseholders. For service charge arrears, Tribunal determination followed by debt recovery is faster, cheaper, and more likely to result in payment. For covenant breaches (short-term letting, unauthorised alterations, nuisance), a formal Section 146 notice creates sufficient pressure to obtain compliance in most cases without needing to commence court proceedings. Forfeiture is a backstop, not a first response.
Key Takeaways
Forfeiture has not been abolished — but its use is heavily restricted
Despite two decades of reform pressure and explicit government statements about abolition, forfeiture of long residential leases has not been abolished. The 2024 Act restricted it further but did not end it. RTM directors and freeholders still have forfeiture available as a remedy. The restrictions make it procedurally demanding and the outcome uncertain, but the remedy exists and in extreme cases is the appropriate one to pursue.
The disproportion between the breach and the loss is why courts are so reluctant
A leaseholder who loses a long lease loses the entire value of their property — typically hundreds of thousands of pounds — because of a debt or breach that may be a fraction of that amount. Courts do not ignore this disproportion. The discretion to grant relief from forfeiture exists precisely because Parliament recognised that forfeiture as originally conceived could produce outcomes that were grossly disproportionate. Every court assessment of whether to grant forfeiture or relief weighs this disproportion.
Service charge forfeiture requires a Tribunal determination first
For service charge and administration charge breaches, the Commonhold and Leasehold Reform Act 2002 requires that the amount claimed is determined by the First-tier Tribunal (or agreed in writing by the leaseholder) before a Section 146 notice can be validly served. A landlord who serves a Section 146 notice for unpaid service charges that have not been Tribunal-determined has served a void notice. This prerequisite alone makes service charge forfeiture a slow and procedurally demanding route.
Waiver is a constant risk that must be actively managed
A landlord who becomes aware of a breach and then does anything that affirms the continued existence of the lease — most commonly, demanding or accepting rent — may waive the right to forfeit for that breach. Waiver is one of the most common tactical errors in forfeiture proceedings and has defeated many otherwise valid claims. Once a decision is made to pursue forfeiture, rent demands and any other communications that acknowledge the tenancy's continuation must be carefully managed from that point forward.
Forfeiture for non-payment of rent is procedurally different
The most straightforward forfeiture route — peaceable re-entry without court proceedings — is theoretically available for rent breaches. In practice, physically changing the locks on an occupied residential property exposes the landlord to criminal liability under the Protection from Eviction Act 1977. Court proceedings are effectively always required for occupied residential properties. Non-payment of rent (including ground rent under historic leases) triggers different procedural rules from covenant breaches but the same judicial reluctance to grant forfeiture without relief.
Mortgagee protection adds procedural complexity
Where a leaseholder has a mortgage on the flat, the mortgagee has a separate right to apply for relief from forfeiture. A freeholder who obtains forfeiture without having given the mortgagee notice and an opportunity to seek relief may face a challenge from the mortgagee. In practice, the mortgagee will pay the arrears and remedy the breach to protect their security, which means the landlord receives what they were owed — but the process becomes more complex and the parties to the proceedings multiply.
What Forfeiture Is
Forfeiture is the right of a landlord to bring a lease to an end by re-entering the property when the tenant has committed a breach of a condition of the lease. In residential leasehold, it is the mechanism by which a freeholder or RTM company can, in principle, terminate a long lease and recover the flat.
The right of forfeiture must be expressly reserved in the lease. Most long residential leases contain a forfeiture clause giving the landlord the right to re-enter and forfeit the lease in specified circumstances: typically non-payment of rent or service charge, breach of a user covenant, breach of a repairing covenant, or insolvency of the leaseholder.
What makes forfeiture unusual compared to most other remedies is that the consequence of the remedy is disproportionate by design. The leaseholder loses the entire lease — and its value — regardless of the size of the breach. A leaseholder who has not paid £5,000 of service charges faces the same ultimate forfeiture risk as one who has committed persistent, serious antisocial behaviour. Courts have always recognised this and have exercised their discretion to moderate it through the doctrine of relief from forfeiture.
The Breaches That Can Trigger Forfeiture
The forfeiture clause in the lease defines which breaches can trigger the right. In a standard long residential lease, the most common forfeiture-triggering breaches are:
| Breach type | How It Works and What Prerequisites Apply |
|---|---|
| Non-payment of service charge | The most commonly litigated forfeiture ground. Before a Section 146 notice can be served, the amount claimed must be determined by the First-tier Tribunal or agreed in writing by the leaseholder (Commonhold and Leasehold Reform Act 2002, section 81). The minimum amount outstanding before forfeiture can be pursued is subject to a de minimis threshold. A valid Section 146 notice must then be served and the leaseholder given a reasonable period to remedy. |
| Non-payment of ground rent | Where the lease retains a ground rent, non-payment can trigger forfeiture. Under the Commonhold and Leasehold Reform Act 2002, a landlord may not forfeit for non-payment of ground rent unless the amount outstanding has been due for at least three years. This restriction significantly narrows the practical availability of forfeiture for ground rent arrears, particularly given the 2024 Act's ground rent cap provisions. |
| Breach of user covenant | Using the flat for a prohibited purpose — short-term holiday letting in breach of a residential use covenant, running a business from the flat, or using it in a way that constitutes nuisance. A Section 146 notice must be served. The breach may or may not be remediable depending on its nature. Where the breach is ongoing and continuing (such as persistent short-term letting), the Section 146 notice can be followed by proceedings once the notice period expires without compliance. |
| Breach of repairing covenant | Where the lease places a repairing obligation on the leaseholder and they have not maintained their demise to the required standard. A Section 146 notice must be served. The Leasehold Property (Repairs) Act 1938 provides additional protections for leaseholders with longer leases — where more than three years of the term remain, the leaseholder can serve a counter-notice requiring the landlord to apply to court for leave to proceed. This significantly slows the forfeiture process for repairing covenant breaches. |
| Insolvency | Where the leaseholder becomes bankrupt or a company leaseholder goes into liquidation, the lease typically contains a provision allowing forfeiture. In practice, the trustee in bankruptcy or liquidator will often seek to sell the lease to realise its value before forfeiture can be effected. The interplay with insolvency law is complex and legal advice is essential before taking any steps. |
The Process: Section 146 and Beyond
Satisfy the prerequisites for the breach type
For service charge breaches: obtain a Tribunal determination that the charge is reasonable and payable, or obtain the leaseholder's written agreement to the amount. For rent breaches: confirm the three-year threshold is met if pursuing ground rent. For covenant breaches: confirm the forfeiture clause covers the specific breach. Any failure to satisfy the prerequisites will invalidate the Section 146 notice and require the process to be restarted.
Serve the Section 146 notice
The notice must be in writing, served on the leaseholder at their address under the lease (and on any mortgagee where known). It must specify the breach complained of with sufficient particularity; require the leaseholder to remedy the breach (if remediable) within a reasonable period; and require compensation for the breach. A Section 146 notice that is defective in any of these respects is void and forfeiture proceedings cannot validly follow from it.
Wait the reasonable remedy period
What constitutes a reasonable period depends on the nature of the breach. For a minor repair, it might be a few weeks. For significant structural works, it could be several months. The courts have not prescribed a minimum period but will invalidate proceedings where the landlord has not given the leaseholder a genuine opportunity to remedy. Acting too quickly after service of the Section 146 notice is a common procedural error.
Issue forfeiture proceedings in the county court
For occupied residential premises, the landlord cannot physically re-enter without a court order (doing so risks criminal liability under the Protection from Eviction Act 1977). Forfeiture proceedings are issued in the county court. The claim must set out the lease clause relied on, the breach committed, the Section 146 notice served, and the relief sought. The leaseholder (and any mortgagee) is served with the claim and has the opportunity to respond and to seek relief from forfeiture.
Court hearing and relief application
The court considers whether the breach is established and whether to grant forfeiture or relief. The leaseholder can apply for relief from forfeiture at this stage or before the hearing. In almost all residential cases involving a long lease, the court will consider whether relief is appropriate. If the breach is remediable and the leaseholder offers to remedy it, relief will typically be granted on terms — usually requiring the leaseholder to pay the arrears (if any), remedy the breach, and pay the landlord's costs within a specified period.
Outcome: forfeiture or relief on terms
Where relief is granted, the leaseholder keeps their lease but must comply with the terms set by the court. Where forfeiture is granted, the landlord recovers the flat and the leaseholder loses the lease and its value. In residential cases, outright forfeiture without relief is rare and reserved for the most serious cases: persistent non-payment despite multiple opportunities to remedy, serious antisocial behaviour where the breach is incapable of remedy, or abandonment of the property.
Relief From Forfeiture: How It Works and Why It Usually Succeeds
The right to apply for relief from forfeiture is the leaseholder's primary protection against the disproportionate consequences of a forfeiture claim. It derives from the court's equitable jurisdiction and is now given statutory form in the County Courts Act 1984 and the Supreme Court Act 1981.
A leaseholder (or their mortgagee) can apply for relief at any stage before the forfeiture order is executed — and in some cases even after. The court has a wide discretion. When deciding whether to grant relief, it considers:
- The nature and gravity of the breach
- The conduct of the parties — including whether the leaseholder has made genuine attempts to remedy or whether they have been deliberately obstructive
- Whether the breach is capable of remedy
- The value of the lease relative to the amount outstanding or the harm caused by the breach
- Whether granting relief would be equitable in all the circumstances
In practice, for a long residential lease, the disproportion between the value of the lease (often hundreds of thousands of pounds) and the breach (often a few thousand pounds of service charge arrears or a remediable covenant breach) makes relief a near-automatic outcome where the leaseholder is willing to remedy. The court would need a compelling reason not to grant relief on terms.
The practical significance of relief from forfeiture is that forfeiture proceedings, in most residential cases, do not produce forfeiture. They produce a court order requiring the leaseholder to remedy the breach and pay the landlord's costs. This is a legitimate and sometimes useful outcome — it provides an enforceable court order with consequences for non-compliance — but it is not the dramatic remedy the name suggests. Understanding this changes how forfeiture should be assessed as a tool. It is expensive and slow to get to a court order that you could have obtained through other means. It is rarely the fastest or cheapest route to compliance.
What the Leasehold and Freehold Reform Act 2024 Changed
Service charge forfeiture prerequisites. The 2002 Act required a Tribunal determination before a Section 146 notice could be served for service charges. The 2024 Act strengthened this, making the requirement more clearly expressed and closing gaps that some freeholders used to serve notices on disputed charges that had not been formally determined.
Ground rent forfeiture. With the 2024 Act's ground rent cap and ongoing reforms, many existing ground rents are being extinguished or capped. As ground rents reduce in significance, ground rent forfeiture becomes increasingly rare as a live practical issue, though it technically remains available where a historic ground rent obligation exists.
Forfeiture as a pressure tactic. Some freeholders served Section 146 notices as a way to generate legal costs charges against leaseholders, rather than as a genuine forfeiture route. The 2024 Act strengthened provisions on costs recovery and the circumstances in which legal costs can be passed to leaseholders through the service charge, reducing the tactical incentive for vexatious Section 146 notices.
Abolition horizon. The government has stated its intention to abolish forfeiture for residential long leases and to replace it with a proportionate remedy regime. This has not yet been enacted. The 2024 Act was an interim step. Abolition legislation is anticipated in a future parliamentary session but no firm timetable has been set.
When Forfeiture Is and Is Not the Right Tool
For most RTM directors and managing agents, the question is not whether forfeiture is legally available but whether it is the right approach to a specific enforcement problem.
Forfeiture is rarely the right first tool. The situations where it may become appropriate are:
- Persistent and serious service charge non-payment where the leaseholder has been through the Tribunal process, a debt claim has been issued and judgment obtained, and enforcement methods (attachment of earnings, charging order) have been exhausted or are impractical. At this stage, a Section 146 notice creates additional pressure and may produce compliance where nothing else has.
- Serious, persistent antisocial behaviour or nuisance where the breach is incapable of remedy (a leaseholder convicted of a serious crime at the property, for example) and the RTM company has documented extensive attempts to address the behaviour through less dramatic means.
- Abandonment where a flat has been abandoned and the leaseholder is untraceable, and the RTM company needs to recover and secure the property.
Forfeiture is almost never the right tool for:
- A first service charge dispute — use the Tribunal and debt recovery instead
- A short-term letting breach on first discovery — use the lease enforcement process (formal notice, Tribunal application) instead
- Minor repair breaches — agree a schedule of works and monitor compliance instead
- Any situation where the primary goal is to receive payment or obtain compliance rather than to terminate the lease
For how short-term letting breaches should be enforced through the lease rather than forfeiture, see Managing Short-Term Lets in a Block: The Airbnb Problem for RTM Directors. For service charge enforcement through the Tribunal, see Service Charges Explained.
Frequently Asked Questions
Yes, in principle — forfeiture remains available for serious or persistent breaches where the forfeiture clause in the lease covers the breach, the statutory prerequisites are satisfied, and a valid Section 146 notice has been served. In practice, courts grant relief from forfeiture routinely in residential cases and actual forfeiture of a long lease is uncommon. The 2024 Act added further restrictions, particularly for service charge breaches.
A formal notice required under the Law of Property Act 1925 before forfeiture proceedings can be issued for breaches other than non-payment of rent. It must specify the breach, require it to be remedied if remediable, and require compensation. For service charge breaches, the amount must first be Tribunal-determined or agreed in writing before the notice can validly be served. The leaseholder must be given a reasonable period to comply before proceedings are issued.
The 2024 Act strengthened the prerequisites for service charge forfeiture, reduced the tactical use of Section 146 notices as a costs generation mechanism, and continued the direction of restricting forfeiture further. It did not abolish forfeiture. The government has stated its intention to do so in future legislation but no timetable has been set and forfeiture remains available under current law.
Yes — courts have a discretionary power to grant relief from forfeiture, allowing the leaseholder to keep their lease typically on condition that the breach is remedied and the landlord's costs are paid. For residential long leases, relief is routinely granted where the leaseholder remedies the breach. Outright forfeiture without relief is uncommon and reserved for the most serious cases of persistent non-compliance.
Rarely. For most service charge disputes, a First-tier Tribunal determination followed by a county court debt claim is faster, cheaper, and more likely to result in payment than forfeiture proceedings. Forfeiture for service charges is procedurally complex (Tribunal determination required first, Section 146 notice, court proceedings, likely relief application) and unlikely to result in actual forfeiture because courts will grant relief where the leaseholder remedies. Use forfeiture as a backstop after other enforcement routes have been exhausted.
Managing a block with a leaseholder who will not comply?
Neon handles lease enforcement for RTM companies across East London and Essex — from formal breach notices and Tribunal applications through to service charge recovery and, where necessary, legal referral for forfeiture advice. Most enforcement issues are resolved well before forfeiture becomes relevant when the right process is followed from the start.
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