Section 146 Notice for Commercial Lease Breaches
A Section 146 notice is generally required before a commercial landlord can enforce a right of re-entry or forfeiture for a breach of lease other than non-payment of rent. The notice must identify the breach, require remedy where the breach is capable of remedy and require monetary compensation.
What is a Section 146 notice?
A Section 146 notice is a formal notice served under section 146 of the Law of Property Act 1925 before a landlord enforces a right of re-entry or forfeiture for many breaches of a lease other than non-payment of rent.
The notice must specify the breach complained of. If the breach is capable of remedy, it must require the tenant to remedy it. It must also require the tenant to make compensation in money for the breach.
The landlord must then allow the tenant a reasonable time to comply before the right of re-entry or forfeiture is enforced.
What must a Section 146 notice contain?
The wording must reflect the actual lease, breach and remedy sought. A generic template should not be used without checking the facts.
Specify the breach
The notice must identify the particular breach relied upon clearly enough for the tenant to understand the allegation.
Require remedy where possible
If the breach is capable of remedy, the notice must require the tenant to remedy it.
Require compensation
Section 146 requires the notice to require the tenant to make compensation in money for the breach.
Allow reasonable time
The tenant must be given a reasonable opportunity to remedy the breach where it is capable of remedy and to make reasonable compensation.
Is a Section 146 notice required for unpaid commercial rent?
Section 146 is generally not the rent-arrears notice
Section 146 does not generally require this notice before forfeiture for non-payment of rent.
Where rent arrears have triggered a contractual right of re-entry, the landlord may instead need to consider whether the objective is possession through forfeiture or rent recovery through CRAR.
Compare CRAR and forfeiture →Section 146 usually applies before forfeiture
For many breaches other than non-payment of rent, the landlord cannot enforce the right of re-entry or forfeiture until the statutory notice requirements have been satisfied.
The lease must still contain an applicable right of re-entry, and the breach relied upon must actually have occurred.
Commercial lease forfeiture →When might a Section 146 notice be used?
The lease wording and evidence must be checked in every case, but common examples include the following.
Unauthorised alterations
Structural or other works carried out without consent where the lease required landlord approval.
Disrepair
Failure to comply with repairing, reinstatement or maintenance obligations, subject to additional statutory protections in qualifying cases.
Unauthorised assignment or subletting
Assignment, sharing or occupation arrangements made contrary to the lease's alienation provisions.
Prohibited use
Use outside the permitted-use covenant, or activity expressly prohibited by the lease.
Nuisance or interference
Conduct affecting neighbouring occupiers, common areas or the wider property contrary to lease covenants.
Insurance or compliance breach
Conduct affecting insurance or breaching contractual safety, access or regulatory obligations.
What happens before a Section 146 notice is served?
Check the lease
Confirm the breached covenant, the forfeiture or re-entry clause and any contractual conditions affecting enforcement.
Establish the breach
Gather photographs, reports, correspondence, inspection material or other evidence supporting the allegation.
Check whether the right has been waived
Conduct recognising the lease as continuing after knowledge of the breach can affect the landlord's right to rely on that breach for forfeiture.
Prepare the notice
The notice should identify the breach precisely and reflect whether remedy is possible, the compensation requirement and the relevant evidence.
Serve and preserve evidence
The approved service method should be used and the date, time, location, recipient or delivery method and supporting evidence retained.
Allow reasonable time
The landlord should assess compliance and remedy after a reasonable period before deciding whether any later forfeiture step is available.
How long does a Section 146 notice have to give the tenant?
Section 146 does not prescribe one fixed number of days that applies to every commercial lease breach.
Where the breach is capable of remedy, the tenant must be allowed a reasonable time to remedy it. What is reasonable depends on the nature of the breach, the work or action required, the circumstances of the premises and the surrounding facts.
Issues that can change the Section 146 route
Service of a notice does not cure a defective right to forfeit. These matters should be considered before the notice is relied upon.
Preparation, professional service and evidence
UK Bailiffs can support Section 146 instructions from the documents and scope supplied by the client, or serve a notice prepared and approved by the client's solicitor.
Our service can include reviewing the supplied lease and breach information for operational completeness, planning service, agent attendance, appropriate evidence of delivery and a service report.
Where the underlying breach, drafting, waiver position or right to forfeit is disputed or legally complex, the notice should be approved by the client's solicitor before service.
UK Bailiffs Section 146 Guide
Our downloadable Section 146 guide provides a practical overview for commercial landlords, managing agents and property professionals dealing with lease breaches.
It covers the purpose of a Section 146 notice, common commercial lease breaches, service considerations and the relationship between Section 146 and commercial lease forfeiture.
Download the UK Bailiffs Section 146 Guide
Frequently asked questions
What is a Section 146 notice?
When is a Section 146 notice required?
What must a Section 146 notice contain?
Is a Section 146 notice required for commercial rent arrears?
How long must a Section 146 notice give the tenant?
Does a Section 146 notice terminate the lease?
Can a Section 146 notice be used for disrepair?
What happens if the tenant remedies the breach?
Can the tenant apply for relief from forfeiture?
Who can serve a Section 146 notice?
Can UK Bailiffs prepare and serve a Section 146 notice?
Legislation and official guidance
Breach, forfeiture and landlord remedies
Need a Section 146 notice prepared or served?
Send us the lease, breached covenant, forfeiture clause, supporting evidence and authority to act. We can identify the operational information required for preparation or professional service and provide clear evidence of attendance.
