Forfeiture of Commercial Lease in England and Wales How It Works

Описание: Forfeiture of Commercial Lease in England and Wales: How It Works
Forfeiture is the legal right of a landlord to end a commercial lease early if the tenant breaches the lease terms, such as non-payment of rent or other covenants.
When Can a Landlord Forfeit a Commercial Lease?
A commercial lease must explicitly include a forfeiture clause to allow the landlord to take back possession. Common breaches that may trigger forfeiture include:
Non-payment of rent
Breach of lease covenants (e.g. unauthorised alterations, subletting, illegal use)
Insolvency of the tenant
Methods of Forfeiture
There are two main ways a landlord can forfeit a lease:
a) Peaceable Re-entry
The landlord physically re-enters the property and changes the locks.
This is only legal if no one is present and should be done with extreme caution to avoid unlawful eviction claims.
Commonly used for non-payment of rent.
b) Court Proceedings
The landlord applies to the court for possession.
Typically used for non-rent breaches (like Disrepair or other covenant breaches) or if peaceable re-entry is not possible.
Procedure for Non-Payment of Rent
No prior notice is needed if the lease allows for peaceable re-entry.
Re-entry must be done without confrontation.
If proceeding via court, a claim for possession is issued.
Note: If the tenant pays all arrears before forfeiture or court judgment, they may avoid forfeiture.
Procedure for Other Breaches (e.g. Disrepair)
The landlord must first serve a Section 146 Notice under the Law of Property Act 1925.
The notice must:
Specify the breach
Require the tenant to remedy it (if capable of remedy)
Require the tenant to pay compensation (if applicable)
If the tenant fails to comply, the landlord may proceed with forfeiture (peaceably or via court).
Tenant's Right to Relief from Forfeiture
Tenants can apply for relief from forfeiture, meaning reinstatement of the lease, if:
They remedy the breach (e.g. pay arrears or fix the issue)
They act within a reasonable time (usually within 6 months for rent arrears)
Courts generally favour granting relief, especially where the breach is minor or has been remedied.
Waiver of Forfeiture
If a landlord acts in a way that recognises the lease after becoming aware of the breach, such as accepting rent, they may waive the right to forfeit.
Important Legal Considerations
Legal advice is strongly recommended before any forfeiture action.
Unlawful forfeiture can lead to damages claims for trespass or wrongful eviction.
Landlords must strictly follow procedures to avoid penalties.
Forfeiture of Commercial Lease in England and Wales: How It Works

In this guide, we explain how the forfeiture process for commercial property works, the correct legal procedures, and the risks landlords must avoid.
What Is Forfeiture in a Commercial Lease?
Forfeiture is the landlord's right to bring a lease to an end prematurely due to the tenant's breach of contract. This right must be explicitly stated in the lease agreement through a forfeiture clause. Common grounds for forfeiture include:
Non-payment of rent
Breach of lease covenants (e.g. unauthorised subletting, Disrepair)
Tenant insolvency
Forfeiture is distinct from eviction, as it deals specifically with the termination of a lease under property law.
How Can a Landlord Forfeit a Commercial Lease?
There are two main ways a landlord can forfeit a commercial lease in England and Wales:
Peaceable Re-entry
This involves the landlord entering the property and changing the locks, thereby physically excluding the tenant. It is only lawful if:
The lease includes a forfeiture clause.
The breach relates to non-payment of rent.
The re-entry occurs without confrontation—usually when the property is unoccupied.
Peaceable re-entry is not recommended for breaches other than rent arrears and must be carried out with extreme caution to avoid unlawful eviction claims.
Court Proceedings
If the tenant is present or the breach is not rent-related (e.g. Disrepair or unlawful use), the landlord must issue possession proceedings in court. This route is safer and provides legal clarity.

We recommend seeking legal advice before proceeding with a commercial tenant eviction via court.
Forfeiture for Non-Payment of Rent
Where the breach concerns rent arrears, landlords may forfeit the lease without serving notice—provided the lease includes the appropriate forfeiture clause. However:
Acceptance of rent after the breach may waive the right to forfeit.
Tenants retain the right to apply for relief from forfeiture by paying arrears promptly.
For high-value arrears or repeated breaches, it is often preferable to pursue commercial rent recovery alongside or before forfeiture.
Forfeiture for Breach of Other Lease Covenants
For breaches such as Disrepair, subletting, or illegal use, the landlord must first serve a Section 146 Notice under the Law of Property Act 1925. This notice must:
Specify the breach clearly
Require the tenant to remedy it (if possible)