When can a freeholder forfeit a lease?

In England and Wales, forfeiture is the leasehold remedy that can end a long lease, but residential lease forfeiture is much more constrained than many freeholder letters suggest. Scotland has very little long residential leasehold and uses irritancy rather than this forfeiture regime.

What is forfeiture, and can a freeholder really take your flat?

Gov.uk’s own guidance says residential forfeiture “can only” happen by court order, but the actual England and Wales rule is narrower: a freeholder needs court proceedings while someone is lawfully living in the flat, whereas an empty leasehold flat can still be forfeited by peaceable re-entry if the lease and the law allow it. The Protection from Eviction Act 1977 says it is unlawful to enforce a right of re-entry or forfeiture “otherwise than by proceedings in the court while any person is lawfully residing in the premises”, which is why the occupied-flat case is different from an unoccupied one. A forfeiture clause in a residential lease is therefore real, and forfeiture of leasehold can in principle strip the leaseholder of the flat and the equity in it, but the freeholder must still pass the relevant statutory hurdles and the leaseholder can apply for relief from forfeiture. Scotland is different: long residential leasehold barely exists, and the comparable concept is irritancy, not forfeiture.

Can a freeholder forfeit a lease for unpaid ground rent?

A freeholder in England and Wales can forfeit a lease for unpaid ground rent only if the lease contains a forfeiture right and the arrears pass the statutory threshold, but no Section 146 notice is needed for non-payment of rent. The Law of Property Act 1925 preserves the separate law on “re-entry or forfeiture or relief in case of non-payment of rent”, and LEASE guidance states that for unpaid ground rent the landlord “does not need to give you a section 146 notice before starting proceedings in the county court to repossess your home.” The key brake is the Commonhold and Leasehold Reform Act 2002 threshold: for a long lease of a dwelling, the landlord may not forfeit for unpaid rent, service charges or administration charges unless the unpaid amount is high enough or old enough. In practice, forfeiture for non-payment of ground rent alone is rare because the £350 trigger is a small sum to litigate over, but ignoring ground rent demands is still risky.

Can a freeholder forfeit a lease for unpaid service charges?

A freeholder in England and Wales can forfeit for unpaid service charges only if the lease allows forfeiture, the service-charge or administration-charge debt is admitted or finally determined, and the statutory arrears threshold is met. The extra service-charge rule comes from section 81 of the Housing Act 1996, which says a landlord may not exercise forfeiture for failure to pay a service charge or administration charge unless the required condition is satisfied; in practice that means the sum has been admitted by the leaseholder or determined by a court, tribunal or arbitral process. That requirement sits on top of the Commonhold and Leasehold Reform Act 2002 threshold for unpaid rent, service charges and administration charges, not instead of it. If a leaseholder does not pay service charges, the usual early pressure is debt recovery, interest or a county court judgment, with forfeiture held back as the nuclear option because lenders and courts treat loss of the lease as a severe consequence.

How much do you have to owe before a freeholder can start forfeiture?

In England and Wales, the operative forfeiture threshold for unpaid ground rent, service charges or administration charges is more than £350, or any unpaid amount that has been outstanding for more than three years; the £500 figure in the Act is only the permitted ceiling, not the sum now in force. Section 167 of the Commonhold and Leasehold Reform Act 2002 creates the small-arrears protection and allows regulations to prescribe a sum up to £500, but England’s 2004 regulations prescribe £350 and Wales’s 2005 regulations independently prescribe the same £350 figure. The same English regulations prescribe three years as the relevant period, and Wales uses the same three-year period. That means a freeholder cannot start forfeiture merely because a leaseholder is a few weeks late with a small ground rent or service-charge bill. Northern Ireland is different: forfeiture exists, but there is no equivalent minimum arrears threshold.

What happens if a leaseholder breaches the lease?

If a leaseholder in England and Wales breaches a lease covenant other than paying rent, the freeholder generally cannot move to forfeiture until the breach has been admitted or determined and the Section 146 process has been used. Section 168 of the Commonhold and Leasehold Reform Act 2002 says a landlord under a long lease of a dwelling may not serve a Section 146 notice for breach of covenant unless the statutory condition is satisfied, and one express route is that “the tenant has admitted the breach.” Other routes include a court, tribunal or arbitral determination, depending on the issue. A breach of lease by a leaseholder might be unauthorised alterations, unlawful subletting, nuisance, pets, or another breach of leasehold covenant, but the practical remedy is often an injunction, damages, compliance demand or debt claim before forfeiture. The forfeiture threat matters because it can engage mortgage lenders quickly, but it is not an instant power to take the flat.

What is a Section 146 notice, and what should you do if you get one?

A Section 146 notice is the formal England and Wales breach of lease notice a freeholder normally must serve before enforcing forfeiture for a lease covenant breach other than non-payment of rent, and a leaseholder who gets one should treat it as urgent legal-risk correspondence. Section 146 of the Law of Property Act 1925 says a forfeiture right for breach of covenant is not enforceable unless the lessor serves a notice specifying the breach, requiring it to be remedied if capable of remedy, and requiring compensation where appropriate. A leaseholder should not ignore a lease forfeiture notice, because the next step may be court proceedings or, for an unoccupied flat in the right circumstances, peaceable re-entry. The immediate response is to check whether the alleged breach is admitted or determined, whether it is capable of remedy, whether compensation is demanded, and whether an application for relief from forfeiture is needed; the court has discretion to grant or refuse relief.

Last reviewed August 2026.

Sources

• Protection from Eviction Act 1977 s.2 — “Where any premises are let as a dwelling on a lease which is subject to a right of re-entry or forfeiture it shall not be lawful to enforce that right otherwise than by proceedings in the court while any person is lawfully residing in the premises or part of them.” Source
• GOV.UK leasehold guidance — “Legally, the lease of a residential property can only be forfeited by a Court Order.” Source
• Law of Property Act 1925 s.146 — “Where a lessor is proceeding, by action or otherwise, to enforce such a right of re-entry or forfeiture, the lessee may, in the lessor's action, if any, or in any action brought by himself, apply to the court for relief” Source
• Land Tenure Reform (Scotland) Act 1974 Part II — “It shall be a condition of every long lease executed after the commencement of this Act that, subject to the provisions of this Part of this Act, no part of the property which is subject to the lease shall be used as or as part of a private dwelling-house.” Source
• Law of Property Act 1925 s.146 — “This section does not, save as otherwise mentioned, affect the law relating to re-entry or forfeiture or relief in case of non-payment of rent.” Source
• Commonhold and Leasehold Reform Act 2002 s.167 — “A landlord under a long lease of a dwelling may not exercise a right of re-entry or forfeiture for failure by a tenant to pay an amount consisting of rent, service charges or administration charges (or a combination of them) ("the unpaid amount") unless the unpaid amount—” Source
• Commonhold and Leasehold Reform Act 2002 (Prescribed Sum and Period) (England) Regulations 2004 reg.2 — “The sum prescribed for the purposes of subsection (1)(a) of section 167 (failure to pay small amount for short period) of the Commonhold and Leasehold Reform Act 2002 is £350.” Source
• Commonhold and Leasehold Reform Act 2002 (Prescribed Sum and Period) (England) Regulations 2004 reg.2 — “The period prescribed for the purposes of subsection (1)(b) of that section is three years.” Source
• Commonhold and Leasehold Reform Act 2002 (Prescribed Sum and Period) (Wales) Regulations 2005 reg.2 — “The sum prescribed for the purposes of subsection (1)(a) of section 167 (failure to pay small amount for short period) of the Commonhold and Leasehold Reform Act 2002 is £350.” Source
• Housing Act 1996 s.81 — “A landlord may not, in relation to premises let as a dwelling, exercise a right of re-entry or forfeiture for failure by a tenant to pay a service charge or administration charge unless—” Source
• Commonhold and Leasehold Reform Act 2002 s.168 — “A landlord under a long lease of a dwelling may not serve a notice under section 146(1) of the Law of Property Act 1925 (c. 20) (restriction on forfeiture) in respect of a breach by a tenant of a covenant or condition in the lease unless subsection (2) is satisfied.” Source
• Commonhold and Leasehold Reform Act 2002 s.168 — “(b)the tenant has admitted the breach, or” Source
• Law of Property Act 1925 s.146 — “A right of re-entry or forfeiture under any proviso or stipulation in a lease for a breach of any covenant or condition in the lease shall not be enforceable, by action or otherwise, unless and until the lessor serves on the lessee a notice—” Source
• Law of Property Act 1925 s.146 — “Where a lessor is proceeding, by action or otherwise, to enforce such a right of re-entry or forfeiture, the lessee may, in the lessor's action, if any, or in any action brought by himself, apply to the court for relief; and the court may grant or refuse relief, as the court, having regard to the proceedings and conduct of the parties under the foregoing provisions of this section, and to all the other circumstances, thinks fit” Source
• LEASE guidance on a landlord’s right to end a lease — “This does not apply in the case of unpaid ground rent, where your landlord does not need to give you a section 146 notice before starting proceedings in the county court to repossess your home.” Source
• Conveyancing and Law of Property Act 1881 s.14 — “A right of re-entry or forfeiture under any proviso or stipulation in a lease, for a breach of any covenant or condition in the lease, shall not be enforceable, by action or otherwise, unless and until the lessor serves on the lessee a notice specifying the particular breach complained of and, if the breach is capable of remedy, requiring the lessee to remedy the breach, and, in any case, requiring the lessee to make compensation in money for the breach, and the lessee fails, within a reasonable time thereafter, to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money, to the satisfaction of the lessor, for the breach.” Source