Assured shorthold tenancy landlords seeking possession use Section 8 (or formerly Section 21) Housing Act 1988 notices. Section 146 LPA 1925 applies exclusively to long residential leases held at a low ground rent — typically flat owners. Mixing up the two regimes is a fundamental error.
CLRA 2002 s.168 — residential long lease: FTT determination required first
The Commonhold and Leasehold Reform Act 2002 s.168 imposes a critical restriction for residential long leases: the freeholder cannot serve a s.146 notice for a non-rent breach unless and until the lessee has admitted the breach or the breach has been determined by the First-tier Tribunal (Property Chamber) or a court.
- Stage 1: Freeholder applies to FTT (Property Chamber) for determination that lessee has breached a specified covenant
- FTT hears evidence from both parties and determines whether the breach occurred — this process alone can take 6–18 months
- Stage 2 (after FTT determination): Freeholder can then serve the s.146 notice requiring remedy
- Stage 3: If lessee does not remedy and comply, freeholder can issue forfeiture proceedings in the county court
- Total timeline from FTT application to forfeiture: typically 12–24 months minimum
CLRA 2002 s.167–169 — arrears threshold: no forfeiture below £350 or under 3 years
Section 167–169 CLRA 2002 prohibit forfeiture of a residential long lease for non-payment of rent, service charges, or administration charges unless both thresholds are met:
- The amount outstanding must exceed £350; AND
- The amount (or part of it) must have been outstanding for more than 3 years
- Below either threshold — forfeiture for non-payment is prohibited, even if the freeholder has a right of re-entry clause in the lease
- Service charge disputes: a disputed service charge need not be paid pending FTT determination (LTA 1985 s.27A(4)) — and the freeholder cannot forfeit unless the FTT has determined it payable and both thresholds are met
- These thresholds apply to rent, service charges, administration charges — and any combination of them
Because relief from forfeiture is routinely granted where the breach is remedied and costs paid, forfeiture proceedings are often more valuable as a compliance lever than as a terminal remedy. A freeholder who issues forfeiture proceedings typically forces the lessee to remedy the breach and pay legal costs — but rarely actually recovers the property. Budget accordingly.