Section 146 Notices & Lease Forfeiture Explained

Lease forfeiture is a legal remedy available to landlords when a tenant breaches the lease terms. It is typically exercised through peaceable re-entry or possession proceedings and is governed by the Law of Property Act 1925.

What is Lease Forfeiture?

Forfeiture enables landlords to end a lease early due to a tenant’s breach. A forfeiture clause must be included in the lease. Correct legal procedure must be followed, particularly when regaining possession.

Understanding Section 146 Notices of the Law of Property Act 1925

Except for non-payment of rent, a landlord must serve a Section 146 notice before taking enforcement action. The notice must:

• Specify the nature of the breach
• State whether it can be remedied
• Allow a reasonable time to remedy (if applicable)
• Demand compensation if appropriate

Common Breaches That May Trigger Forfeiture

• Non-payment of rent (no Section 146 notice required)
• Unauthorised alterations or structural changes
• Illegal subletting or unauthorised assignment
• Failure to repair, or causing disrepair
• Use of the premises for unlawful activity

Serving a Section 146 Notice

The Section 146 notice must be given in writing and allow the tenant an opportunity to comply. If not complied with, the landlord may proceed with re-entry or apply to the County Court for possession.

Relief from Forfeiture

Tenants can apply to court for relief from forfeiture under Section 138 of the Law of Property Act 1925. Relief is commonly granted if rent arrears are cleared or the breach is remedied quickly. Courts have wide discretion in commercial cases.

Key Case Law

• Billson v Residential Apartments Ltd[1992] 1 AC 494 – Clarified that a Section 146 notice is needed before peaceable re-entry for non-rent breaches
• Expert Clothing Service & Sales Ltd v Hillgate House Ltd[1986] Ch 340 – Discussed whether a breach was remediable
• Hyman v Rose[1912] AC 623 – Defined the court’s power to grant equitable relief from forfeiture