Forfeiture forever?

The article Forfeiture of leases in the September 2025 issue of Property in Practice looked at some of the recent proposals to reform the law of forfeiture and ways to ameliorate the more draconian elements of this archaic law.

Reform of the law of forfeiture has been on the table for some time. The Law Commission considered reform as early as 1968; since then, there have been several reports, bills and other efforts to reform this tricky area of law, none of which have progressed to an act of parliament. 

Even the latest efforts (which were limited solely to the application of the law to long residential leases) were pulled at a relatively early stage from what became the Leasehold and Freehold Reform Act 2024. It seems that – love it or loathe it – forfeiture is here to stay. 

This article goes back to square one and asks the questions what, when and how: what forfeiture is; when landlords may choose to forfeit (and what alternatives exist); and how forfeiture is effected. It also considers a recent court decision, highlighting one of the major challenges to tenants seeking relief from forfeiture.

What?

What is forfeiture? For landlords, the right of re-entry – or forfeiture – is one of the most important controls over the operation of leases. It permits the early termination of a lease and provides a landlord with a relatively simple mechanism to obtain possession against a recalcitrant tenant.

Forfeiture operates in a similar manner to a landlord’s break notice, allowing for the unilateral termination of a lease before the contractual term expires. However, unlike a break clause, it can only be exercised on some event of ‘default’ on the part of the tenant. Also, unlike a break clause, there are ways by which the tenant can ‘reverse’ the effect of forfeiture and obtain relief – as discussed below.

When – and when not?

Perhaps the better question, at least at the outset, is: when should a landlord not terminate a lease on the ground of forfeiture? Because forfeiture terminates a lease (and all derivative interests, such as subleases (Great Western Railway Co v Smith (1876) 2 ChD 235, CA at 253)), the landlord may decide it’s better not to forfeit the lease. In a depressed market, for example, the landlord may struggle to re-let the property or may need to drastically reduce the rent, and so they may prefer to pursue alternative remedies against a tenant who is in breach of covenant.

Following the COVID-19 pandemic, for example, we saw two separate instances where a landlord sought to apply pressure on a tenant who had failed to pay the previous quarter’s rent by re-entering the premises and posting a ‘notice of forfeiture’ on the door. The tenants were delighted to be released from their obligations under their leases, and the landlords’ subsequent arguments that their actions were not effective to forfeit the lease but only amounted to a demand for payment (i) were wrong in law, and (ii) rather suggested that they belatedly regretted their actions.

In both of these cases, the landlord would have been better served by pursuing an alternative remedy that kept the lease in existence.

Alternative remedies

To this end, a landlord faced with a tenant who hasn’t paid the rent may wish to simply issue a claim for the unpaid rent as a debt (there’s no obligation on a landlord to mitigate their loss when pursuing such a claim (Reichman v Beveridge [2006] EWCA Civ 1659)), or pursue a guarantor under the lease. Alternatively, the landlord may choose to call upon the CRAR (Commercial Rent Arrears Recovery) regime – a successor to the remedy of ‘distraining for rent’.

A landlord faced with a tenant who has breached some other covenant in the lease may choose to seek an injunction, compelling the tenant to remedy the breach. Such a claim can be brought alongside a claim in damages to compensate the landlord for any loss. In this latter situation, the landlord elects to continue the lease, notwithstanding the breach – they have ‘waived the right to forfeit’.

However, in many other cases, forfeiture is the only option; the landlord would rather recover possession and find some other tenant for the property or find some other use for it. In these situations, forfeiture remains of great practical importance.

How?

There are two ways in which a landlord may forfeit a lease: by peaceable re-entry (physically, or notionally, taking back possession of the property), and forfeiture by action (issuing, and serving, a claim for possession).

Peaceable re-entry is generally the landlord’s favoured approach, as it’s quick and easy. It may comprise actual re-entry (physically retaking possession), notional re-entry (changing the locks or putting up a chain over open land) or constructive re-entry (reletting the property to a third party). In all instances, the landlord must intend to forfeit (which is usually presumed from the act of retaking possession) and communicate this forfeiture to the tenant.

However, not all leases can be ended by peaceable re-entry. Most importantly, section 2 of the Protection from Eviction Act 1977 renders unlawful any re-entry, other than by court proceedings, of residential premises if someone is lawfully residing in them. For this reason, peaceable re-entry is usually only encountered in the commercial context. In respect of any premises, section 6(1) of the Criminal Law Act 1977 makes it a criminal offence for a person to use or threaten violence to re-enter if they know there is someone present on the premises who is opposed to that entry.

Forfeiture by action is the safer approach for a landlord (and the required approach for all situations in which the 1977 acts apply). It requires the landlord to issue a claim in the courts for possession of the property. As with peaceable re-entry, the forfeiture must be communicated to the tenant, so it’s the service of proceedings that amounts to forfeiture. 

Complications arise where the landlord seeks additional or alternative remedies to possession, as then it may be said that the forfeiture is not unequivocal. There is currently a tension in the case law as to whether a claim for possession, with a claim for an injunction in the alternative, amounts to a forfeiture (see Wheeler v Keeble (1914) Ltd [1920] 1 Ch 57 and Calabar Properties Ltd v Seagull Autos Ltd [1969] 1 Ch 451).

With either method of forfeiture, there are often numerous pre-conditions for a landlord prior to forfeiting the lease. These may include:

• statutory pre-conditions (such as service of a notice under section 146 of the Law of Property Act 1925, obtaining a determination of breach in respect of a long lease of a dwelling under section 168 of the Commonhold and Leasehold Reform Act 2002, and many others), or 
• contractual pre-conditions (such as a requirement to notify a mortgagee, or the almost universal requirement that rent must be outstanding for a period of time before the lease can be forfeited). Any such contractual pre-condition must be satisfied before the right to forfeit arises (Toms v Ruberry [2019] EWCA Civ 128).

A landlord must also take care to ensure that they have not waived the right to forfeit. Once a landlord has notice of a breach giving rise to the right to forfeit, they must elect whether to continue with the lease or treat it as being at an end. If the landlord communicates the former to the tenant, expressly or impliedly by conduct, they will have waived their right to forfeit, an election from which they cannot unilaterally resile: any forfeiture, thereafter, will be unlawful. The most common form of waiver is the acceptance of rent falling due after the forfeiting breach, of which the landlord has knowledge.

Relief for the tenant

As noted above, to mitigate the harsh effects of forfeiture, equity long ago developed the ability of the tenant to obtain relief from forfeiture.

The rules on relief from forfeiture are legion; they differ depending on how the forfeiture was effected (peaceable re-entry or action) and whether the forfeiture was for a failure to pay rent or a non-rent breach of covenant. Although the courts usually have a wide discretion on whether to grant relief, and the conditions for such a grant, such discretion is not unfettered.

In rent arrears cases, relief is sometimes automatic, for example if the rent and costs are paid in full before the hearing (section 138(2) of the County Courts Act 1984 and section 212 of the Common Law Procedure Act 1852). Even if not paid in advance of the hearing, relief will, in all likelihood, be granted upon payment of the rent and costs, without incurring additional costs.

In non-rent cases, relief is less certain. The court will invariably require that the breach is remedied, but the court has a much wider discretion on whether to grant relief and, if so, the appropriate conditions that the tenant must adhere to. 

Furthermore, tenants may frequently come unstuck due to the unforgiving time limits on applying for relief – usually six months from any re-entry. Where these time limits apply, they are applied strictly; and even when they do not apply, the courts apply them by analogy.

Recent case law

The application of these rules is a minefield for the unwary. This is exemplified by the recent High Court decision of Mentmore Golf Investments Limited v Gaymer [2025] EWHC 2604 (Ch). In this case (a non-rent case where the forfeiture was effected by the service of proceedings), the mortgagee had applied for relief from forfeiture after a possession order was granted by the court, but before the possession order was executed. However, the hearing of the application for relief did not take place until after the landlord had executed the possession order (which is usually treated as the ‘red line’ after which relief is impossible). The High Court judge decided that, as the application had been issued at court before the possession order was executed, the court retained jurisdiction to grant relief. Nevertheless, on the facts of Mentmore, the judge declined to exercise his discretion to grant relief from forfeiture due to the application being what he called “a scheme to string out a piece of litigation [which is] oppressive and abusive”.

The Mentmore decision provides a timely reminder of the intricacies and nuances of the law of forfeiture generally, and applications for relief specifically. 

Conclusion

Forfeiture is a weapon, if not the primary weapon, in every landlord’s armoury when seeking to enforce the terms of a lease. Whether forfeiture is here to stay is anyone’s guess, but it’s certainly here now, and day in, day out, landlords and tenants find themselves tripping up over the application of these arcane and archaic rules. The practitioner in this area is well advised to study the law carefully and ensure that – whether acting for landlord or tenant – they navigate this minefield with care.