Commercial Lease Forfeiture 2026

Forfeiture of Commercial Lease — Re-Entry, Section 146 Notice and Relief from Forfeiture

Forfeiture is the right of a commercial landlord to bring a lease to an early end for breach of covenant — non-payment of rent allows immediate peaceable re-entry without a s.146 notice; all other breaches require a valid s.146 notice (LPA 1925) first. Waiver — accepting rent after knowing of a breach — destroys the right to forfeit. Relief from forfeiture available to tenants within 6 months of peaceable re-entry. Scotland: irritancy under Law Reform (Miscellaneous Provisions) (Scotland) Act 1985.

14 min readUpdated 7 June 2026Last reviewed: 17 May 2026commercial-leaseforfeiturere-entrysection-146

What is forfeiture and when is it available?

Forfeiture is a commercial landlord's right to bring a lease to an early end because the tenant has breached a lease covenant. It requires: (1) a forfeiture (re-entry) clause in the lease — without one, forfeiture is not available; (2) a qualifying breach — non-payment of rent, or breach of another lease covenant. Forfeiture is available in England and Wales; Scotland uses irritancy (Law Reform (Miscellaneous Provisions) (Scotland) Act 1985).

Rent arrears: forfeiture without a section 146 notice

Rent arrears forfeiture does NOT require a s.146 LPA 1925 notice — the landlord can proceed directly to forfeit once the lease grace period has expired
Formal demand for rent is technically required at common law but is almost always waived by a clause in the lease
Grace period: the lease typically specifies 14 or 21 days after the due date before the landlord can forfeit
Once the grace period expires: the landlord can exercise peaceable re-entry (commercial premises only; no residential occupation) or issue court proceedings
After forfeiture for rent: the tenant can apply for relief from forfeiture under County Courts Act 1984 s.138 — if arrears and costs are paid within 4 weeks, relief is available as of right

Breach of other covenants: section 146 notice required first

For any breach other than non-payment of rent — repairing obligations; alienation without consent; breach of use clause; illegal use — the landlord MUST serve a valid s.146 notice (Law of Property Act 1925 s.146) before forfeiting.

The s.146 notice must: identify the breach with particularity; require the tenant to remedy it within a reasonable time (if remediable); require compensation (if the landlord requires it); inform the tenant of the right to apply for relief
Repairing breach: typically 3 months minimum reasonable time; other breaches may be shorter; irremediable breaches: notice required but period may be very short
After serving: wait a reasonable time for remediation before forfeiting — proceeding too quickly can make the forfeiture invalid
Relief from forfeiture for covenant breach: LPA 1925 s.146(2) — court has a wide discretion; will consider nature of breach; whether remedied; tenant's conduct; landlord's loss

Peaceable re-entry: commercial premises only

Peaceable re-entry: the landlord (or authorised enforcement agent) physically re-enters the property, changes the locks, and takes possession without a court order
Commercial premises ONLY: peaceable re-entry is only lawful where there is NO residential occupation at the time of re-entry — if any person resides in any part of the property, court proceedings are required (Criminal Law Act 1977 s.6)
Process: instruct a professional enforcement agent (not personally); document the state of the property; change locks; affix a written notice to the door; photograph property contents
Court proceedings: alternative to peaceable re-entry; takes longer but provides certainty through a court order; tenant can still apply for relief during proceedings

Waiver: the greatest trap in forfeiture

Waiver is the most dangerous pitfall for a commercial landlord exercising forfeiture. Any act by the landlord — with knowledge of the breach — that treats the lease as continuing waives the right to forfeit for that specific breach.

Classic waiver acts: demanding rent for any period after the breach; accepting a rent payment; sending a schedule of dilapidations; any communication treating the lease as in existence
A single post-breach rent demand is almost certainly a waiver — courts have consistently held this
Waiver is breach-specific: it only applies to the specific breach waived; a future breach of the same covenant can still be forfeited
To avoid waiver: once a forfeiture decision is made — stop ALL rent demands immediately; do not accept any rent; instruct a solicitor before sending any communication; act quickly

Relief from forfeiture and Scotland

After peaceable re-entry: the tenant, any mortgagee of the lease, or any lawful sub-tenant can still apply to court for relief from forfeiture — applications should be made within 6 months of re-entry (Billson v Residential Apartments Ltd [1992])
For rent arrears: County Courts Act 1984 s.138 — if tenant pays all arrears plus costs within the court-specified period (typically 4 weeks), relief is available as of right; lease is restored
For covenant breach: LPA 1925 s.146(2) — court has a wide discretion; considers: nature of breach; remediation; tenant's conduct; landlord's loss; fairness of relief
Mortgagee/sub-tenant relief: if the landlord has not notified any mortgagee of the lease, the mortgagee has additional rights to apply for relief
Scotland: commercial leases in Scotland use irritancy (not forfeiture); under LR(MP)(S)A 1985 — for rent arrears: 14-day notice irritancy required before rescission; for other breaches: fair and reasonable time to remedy must be given; no peaceable re-entry in Scotland

Frequently asked questions

Can I forfeit a commercial lease for rent arrears without going to court?+

Yes — for non-payment of rent, a commercial landlord can exercise peaceable re-entry without a court order, by physically re-entering the premises and changing the locks. This is only lawful for commercial premises with no residential occupation at the time. Use a professional enforcement agent, document the entry, and affix a notice to the door. The tenant can still apply for relief from forfeiture within 6 months, so the position is not final until that period passes.

Do I need to serve a section 146 notice before forfeiting a commercial lease?+

Only if the breach is not non-payment of rent. For rent arrears, no s.146 notice is required — once the lease's grace period expires, you can forfeit. For all other breaches (repairs; unauthorised assignment; breach of use clause), you must serve a valid s.146 notice under LPA 1925 — identifying the breach; requiring remediation; informing the tenant of the right to apply for relief — and then wait a reasonable time before forfeiting. Failure to serve a s.146 notice when required makes the forfeiture invalid.

What is waiver of forfeiture and how do I avoid it?+

Waiver occurs when the landlord, knowing of a breach, does any act that treats the lease as continuing — most commonly by demanding or accepting rent. A single post-breach rent demand is almost always a waiver. Once you decide to forfeit: stop all rent demands immediately; do not accept any rent; instruct a solicitor before communicating with the tenant; act as quickly as possible. Waiver is breach-specific — it only applies to that specific breach; a future breach of the same covenant can still be forfeited.

Can the tenant get their commercial lease back after forfeiture?+

Yes — the tenant (and mortgagees or sub-tenants) can apply for relief from forfeiture. For rent arrears: if the tenant pays all arrears plus costs within the period the court specifies (typically 4 weeks), they are entitled to relief as of right and the lease is restored. For covenant breach: the court has a discretion — it considers the nature of the breach, whether it has been remedied, and fairness. After peaceable re-entry, applications should be made within 6 months.

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Waiver of Forfeiture — Commercial Lease UK

Waiver of forfeiture: landlord with knowledge of tenant's breach does unequivocal act treating the lease as continuing (typically accepting/demanding rent accruing after the breach) → right to forfeit for that breach is waived. Knowledge required: landlord (or agent) must know of the specific breach. Segal Securities v Thoseby [1963]: automated rent demand by uninformed employee constitutes waiver. Once-and-for-all breach (unauthorised assignment; subletting; change of use): waived = permanently lost. Continuing breach (failure to repair; prohibited use): accepting rent waives breach to date of acceptance; fresh right to forfeit immediately arises for continuing breach. Avoiding waiver: immediately stop automated rent demands; instruct accounts and managing agents; return tendered rent; do not act under the lease. s.146 notice: accepting rent after serving s.146 notice can waive the notice. Scotland: irritancy (not forfeiture); Law Reform (Misc Provisions) (Scotland) Act 1985.

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