The greatest practical risk in exercising forfeiture rights is waiver. The moment a landlord, knowing of a tenant's breach of covenant, does anything that treats the lease as still continuing — demands rent for a period after the breach; accepts a rent payment; sends a letter referring to future obligations under the lease; serves a schedule of dilapidations — the right to forfeit for that specific breach is gone. The landlord must then wait for a future breach. For this reason, once a commercial landlord decides to exercise forfeiture rights, all rent demands must cease immediately, rent must not be accepted, and all communications must be reviewed by a solicitor before sending.
The other critical distinction in commercial lease forfeiture is between the two types of breach. For non-payment of rent, the landlord can forfeit immediately (subject to the lease's formal demand clause and any grace period) without first serving any notice. For every other type of breach — repairs; use; assignment without consent; illegal use; breach of service charge obligations — the landlord must first serve a statutory notice under Law of Property Act 1925 s.146, specifying the breach, requiring the tenant to remedy it (if it is remediable) within a reasonable time, and informing the tenant of the right to apply for relief from forfeiture.
The two types of forfeiture, peaceable re-entry, waiver and relief from forfeiture
The complete forfeiture process for commercial landlords — from breach to re-entry to the tenant's right to apply for relief:
- Rent arrears forfeiture, s.146 notice for covenant breach, and peaceable re-entry: Re-entry clause: forfeiture requires the lease to contain a forfeiture clause (re-entry clause) — most standard commercial leases do. Without one, forfeiture is not available and the landlord must bring a standard breach of contract claim or seek rescission. Rent arrears forfeiture: if the tenant fails to pay rent by the due date (typically with a grace period in the lease — commonly 14 or 21 days), the landlord can forfeit without serving any notice. Formal demand for the rent is technically required at common law (demand made on the last day of the period; at the property; at a reasonable hour) but modern commercial leases almost always contain a clause waiving the need for formal demand. The landlord can exercise peaceable re-entry or issue court proceedings immediately once the grace period has expired. Section 146 LPA 1925 — breach of other covenants: before forfeiting for any breach other than non-payment of rent, the landlord MUST serve a valid s.146 notice on the tenant. The notice must: (a) identify the breach complained of with reasonable particularity — if the lease contains multiple covenants, the notice must clearly identify which has been breached; (b) require the tenant to remedy the breach if it is capable of remedy — in a reasonable time (typically 3 months for repairing breaches; shorter for other breaches; 'immediately' for irremediable breaches); (c) require the tenant to pay compensation for the breach (if the landlord requires this); and (d) inform the tenant of the right to apply for relief from forfeiture. Once the s.146 notice has been served, the landlord must wait a reasonable time for the tenant to remedy before proceeding to forfeit. Peaceable re-entry (commercial only): the landlord (or their authorised agent — typically a specialist enforcement agency, not the landlord personally) physically re-enters the property, changes the locks, and takes possession. This is only lawful for commercial premises where there is no residential occupation at the time of re-entry. If any person is residing in the premises (even one room used as living accommodation by the tenant's employee), peaceable re-entry is unlawful — see Criminal Law Act 1977 s.6; Protection from Eviction Act 1977. Peaceable re-entry should be carried out by an experienced enforcement agent who will: document the state of the property; change the locks; affix a notice to the door informing the tenant that the landlord has forfeited the lease; photograph the property contents. Court proceedings: the landlord can instead issue a possession claim in the county court (or High Court for high-value leases). The court process takes longer but provides certainty through a court order confirming the forfeiture. The tenant can still apply for relief during court proceedings.
- Waiver of breach, relief from forfeiture and Scotland: Waiver: waiver occurs when the landlord, with knowledge of the breach, does any act that unequivocally treats the lease as continuing. Classic examples: (a) demanding rent payable for a period after the breach (a rent demand dated after the landlord's knowledge of the breach is almost certainly a waiver — courts have repeatedly held this); (b) accepting a rent payment from the tenant (even returning a cheque after cashing it may not undo the waiver); (c) serving a break notice, schedule of dilapidations, or any lease document that presupposes the lease's existence; (d) negotiating a surrender (care needed — ongoing discussions can be evidence of continued recognition of the lease). The waiver only applies to the specific breach that was waived — a future breach of the same covenant can be forfeited. To avoid waiver: once a decision to forfeit is made, stop all rent demands immediately (pause automated systems); do not accept any rent tendered; instruct a solicitor before sending any communication; exercise forfeiture as quickly as possible. Relief from forfeiture: the tenant, any mortgagee of the lease, and any lawful sub-tenant can apply to the court for relief from forfeiture. For non-payment of rent (County Courts Act 1984 s.138): if the tenant pays all rent arrears plus the landlord's costs and fees within the period specified by the court (typically 4 weeks from the possession order), the tenant is entitled to relief as of right — the lease is restored. Where the landlord has effected peaceable re-entry for rent arrears, the tenant can still apply for relief; application should be made promptly (courts expect it within 6 months of re-entry). For breach of other covenants (LPA 1925 s.146(2)): the court has a wide discretion — it will consider the nature of the breach; whether it is remediable; the tenant's conduct and financial standing; the landlord's likely loss; whether relief would be unfair to the landlord. After peaceable re-entry (for any type of breach): the tenant, mortgagee, or sub-tenant can still apply for relief within 6 months of the date of peaceable re-entry (the rule from Billson v Residential Apartments Ltd [1992]; applied to commercial leases). Landlords should be aware that a peaceable re-entry does not guarantee the land is free from the tenant's interest — it creates a potential ongoing liability until any relief application time limit expires. Scotland: Scotland does not have the English law of forfeiture. Scottish commercial leases are subject to the law of irritancy — a landlord's right to rescind a lease for breach. Statutory irritancy is governed by the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985: (a) for non-payment of rent: the landlord must first make a formal demand (a 'notice irritancy') and give the tenant 14 days to pay (or a longer period if the lease provides); if unpaid, the landlord can rescind; (b) for breach of other conditions: the landlord must give 'a fair and reasonable time' to remedy the breach. Courts in Scotland have upheld this anti-irritancy protection strictly. No equivalent of peaceable re-entry in Scotland — the landlord cannot simply change the locks
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: physically re-enter the property, change the locks, and take possession. This is only lawful for commercial premises with no residential occupation at the time. Instruct a professional enforcement agent rather than acting personally — they will document the entry correctly and affix the required notice. The tenant can subsequently apply to the court for relief from forfeiture (typically within 6 months), so the landlord's position is not necessarily final until that period passes or an agreement is reached.
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, a s.146 notice is not required — you can proceed to forfeit once the lease's grace period has expired. For all other breaches (repairs; unauthorised assignment; breach of use clause; etc.), you must serve a valid s.146 notice under the Law of Property Act 1925 before forfeiting — the notice must identify the breach; require remediation; and inform the tenant of the right to apply for relief. Failure to serve a s.146 notice when required renders the forfeiture invalid.
What is waiver of forfeiture and how do I avoid it?+
Waiver occurs when the landlord, knowing of the tenant's breach, does any act that treats the lease as continuing — most commonly by demanding or accepting rent. A single rent demand sent after the landlord knew of the breach is almost always a waiver. To avoid waiver once you have decided to forfeit: immediately stop all rent demands; do not accept any rent payments; do not serve any document that presupposes the lease's existence; instruct a solicitor urgently and exercise forfeiture as quickly as possible. Waiver destroys the right to forfeit for that specific breach — the landlord must then wait for a future breach.
Can the tenant get their lease back after I have forfeited it?+
Yes — the tenant (and any mortgagee of the lease or lawful sub-tenant) can apply to the court 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 breach of other covenants: the court has a discretion whether to grant relief, considering the nature of the breach, whether it was remedied, and whether relief would be fair. After peaceable re-entry, relief applications should be made within 6 months. This means that even after a successful peaceable re-entry, the landlord does not have full certainty for up to 6 months.
- Section 146 notice — breach of leasehold covenant before forfeiture →
- LTA 1954 — commercial tenancy security of tenure →
- CRAR — commercial rent arrears recovery without court order →
- Tenant insolvency — administration moratorium and landlord remedies →
- Mixed-use property — residential and commercial considerations →
- County court judgment — obtaining a CCJ for commercial debt →