Forfeiture of leases

Explaining forfeiture and possession

If a leaseholder breaches the terms of a lease and the matter cannot be settled through mediation and the leaseholder resists the orders of a County Court, the landlord may start lease forfeiture and possession proceedings – in effect, this is their highest power.

Forfeiture and possession allows the landlord to:

• End the lease without any need to compensate the leaseholder

• Repossess property

• Re-let the property to a different leaseholder who will adhere to the terms of the lease

Under what circumstances can a landlord exercise forfeiture and possession?

Below are the circumstances under which a landlord could exercise their forfeiture and possession rights:

• The leaseholder altering the property without the landlord’s permission

• Failure to pay ground rent, service charges or other fees

• Failure to keep the property in acceptable condition

• Using the property for purposes other than those permitted

• Under-letting the property without the landlord’s permission

Forfeiture of leases and the importance of specialist legal advice

It is crucial that landlords hoping to bring lease forfeiture and possession action instruct a specialist solicitor to help ensure that the action is lawful. If the action is unlawful, it could lead to the leaseholder bringing a compensation claim against the landlord.

The following things will be taken into account by a specialist solicitor when deciding if action should be taken:

• Whether possession or forfeiture action is permitted by a clause in the lease for the breach in question

• Whether it is in the landlord’s better off having a leaseholder rather than no leaseholder at all

• How long it might take to find a new leaseholder

• How ground rent might change with the new lease

Forfeiture of leases – what to avoid

  • Getting the peaceable re-entry procedure wrong:

Leases will often contain a clause allowing the landlord to enter the property in order to re-possess the property without taking legal action – this procedure is called ‘peaceable re-entry’. Once inside, the landlord can change the locks and take the leaseholder’s possessions out. However, if damage is done violently to the leaseholder or the property, you can be convicted under the Criminal Law Act 1977. This is therefore a risky procedure.

  • Surrendering your forfeiture right:

Landlords surrender their right to forfeit a lease if they know that a leaseholder has breached the terms of the lease but then act in such a way that demonstrates beyond doubt to the leaseholder that their lease will continue e.g. asking for or taking any fees due.

An expert solicitor will be able to help a landlord to avoid any actions which will waive their right to forfeit.

When it comes to forfeiture of leases, you need expert advice

Lease forfeiture and possession involve very complicated legal work and it is therefore crucial that you have an expert solicitor on board to help you. As well as lease extension, our team are specialists in this area, so:

Get in touch today by filling out the contact form below, or by calling 0800 1404544.

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