Forfeiture of a Commercial Lease: A Guide for Landlords and Tenants

When a commercial tenant breaches the terms of a lease, forfeiture can provide a landlord with a powerful remedy. For a tenant facing the loss of its business premises, the consequences of forfeiture can be severe and immediate. Whether you are a landlord seeking to recover possession of commercial premises or a tenant facing the loss of your business premises, it is important to seek specialist legal advice as soon as an issue arises. 

What Is Forfeiture of a Commercial Lease? 

Forfeiture is the legal process by which a landlord brings a lease to an end following a tenant's breach of the lease terms. In many cases, forfeiture arises where there are significant commercial rent arrears, but it may also be available where there has been another breach of covenant, such as unlawful alterations, unauthorised occupation, disrepair or other breaches of the lease.  

Before a landlord can forfeit a lease, it is necessary to consider the wording of the lease carefully. Most commercial leases contain a forfeiture clause which sets out the circumstances in which a landlord may terminate the lease. 

As experienced forfeiture of lease solicitors, we regularly advise clients on whether a right to forfeit has arisen and, just as importantly, whether that right may have been waived through subsequent conduct. 

How Do You Forfeit a Commercial Lease? 

There are two main scenarios when forfeiting a commercial lease. 

Peaceable Re-Entry. Where the lease permits it and circumstances allow, a landlord may regain possession by peaceably re-entering the premises. This often involves attending the property and changing the locks whilst no one is in the premises. 

Although peaceable re-entry of commercial property can sometimes be dealt with quickly, it carries significant risks if the landlord acts unlawfully or where there is uncertainty regarding the right to forfeit. Incorrect action can expose a landlord to a substantial damages claim. 

If a landlord attempts to forfeit a lease without a valid right to do so, the tenant may be entitled to seek a declaration that the forfeiture was unlawful, an injunction restoring access to the premises and a claim for damages. For this reason, landlords should always obtain specialist advice before taking steps to re-enter commercial premises. A tenant who finds the locks changed should not assume the lease has ended validly. The right to challenge the forfeiture, or to seek relief, is subject to time limits which run from the date of re-entry, and delay may prejudice the tenant's position. 

Court Proceedings. Alternatively, a landlord may commence court proceedings seeking possession of the property. In many cases involving breaches other than non-payment of rent, the landlord will first be required to serve a section 146 notice giving the tenant an opportunity to remedy the breach before forfeiture can take place.  

The appropriate route will depend upon the facts of the case, the terms of the lease and the commercial objectives of the parties.  

Can You Evict a Commercial Tenant for Not Paying Rent? 

One of the most common reasons landlords seek to forfeit a lease is because they have a commercial tenant not paying rent. Where a lease contains a forfeiture clause and the relevant conditions have been satisfied, a landlord may be entitled to terminate the lease and recover possession of the premises. 

However, the position is rarely straightforward. Landlords must consider whether they have inadvertently waived their right to forfeit, for example by demanding or accepting rent after becoming aware of the breach. Timing is often critical. 

For tenants who are in arrears of rent, or whose lease has been forfeit, urgent legal advice is essential. 

Can a Landlord Lose the Right to Forfeit? 

One of the most common pitfalls for landlords is the concept of waiver. Once a landlord becomes aware of a tenant's breach, it must take care not to do anything which recognises the lease as continuing if it wishes to preserve the right to forfeit.  For example, demanding or accepting rent.

Whether a right to forfeit has been waived can be a highly technical issue and mistakes can be costly. Landlords should seek legal advice before communicating with a tenant or accepting any payments where forfeiture is being considered. 

Are There Alternatives to Forfeiture? 

Forfeiture is not always the most appropriate remedy. In some situations a landlord's commercial objectives may be better achieved through other legal action. 

For example, where a tenant is using premises in breach of the permitted use provisions in the lease, carrying out unauthorised alterations, or committing another continuing breach of covenant, a landlord may be able to seek an injunction requiring the tenant to comply with its lease obligations or preventing further breaches. 

Injunctions are often used where a landlord wishes to preserve the lease relationship whilst bringing the tenant's conduct to an end. They can be particularly effective in cases involving unauthorised use, unlawful occupation or other ongoing breaches of covenant. 

Grant Saw advises landlords on the full range of enforcement options available and helps clients determine whether forfeiture, an injunction or another remedy is likely to achieve the right commercial outcome. 

What Is Relief From Forfeiture? 

The law recognises that forfeiture is a serious remedy. In certain circumstances, tenants may apply to the court for relief from forfeiture. 

If relief is granted, the lease may effectively be reinstated, often on conditions such as payment of arrears, costs or compliance with lease obligations. 

Applications for relief are time-sensitive and tenants should seek advice immediately on service of a section 146 notice, if forfeiture has occurred or is threatened. If relief is granted, the lease is generally restored as if the forfeiture had never taken place. 

The courts will consider a range of factors, including the nature of the breach, the conduct of the parties and whether any prejudice has been caused. 

For tenants, swift action can make the difference between remaining in and permanently losing valuable business premises. 

Can a Commercial Landlord Terminate a Lease Early? 

Many people assume that a landlord can simply end a lease whenever a problem arises. In reality, terminating a commercial lease before its contractual expiry date is subject to strict legal rules. 

The landlord must establish a valid right to forfeit and ensure that any statutory and contractual requirements have been followed correctly. Failure to do so can result in expensive litigation and substantial liability. 

Before exercising a right of forfeiture, landlords should also consider the wider commercial implications. Recovering possession may not always be the most advantageous option, particularly where there are concerns about re-letting the property, recovering arrears from guarantors or maintaining rental income. Obtaining specialist advice before taking any action helps landlords weigh these options properly.  

Forfeiture of a commercial lease: frequently asked questions  

Can a commercial landlord change the locks to take back the premises?  

This is known as peaceable re-entry. It is only lawful where the landlord has a valid, unwaived right to forfeit and no one is physically present at the property who opposes the landlord’s entry.  If forfeiture is carried out unlawfully, a landlord could face a substantial damages claim.  

What is a section 146 notice, and when is one required?  

A section 146 notice is required before a landlord can forfeit for most breaches other than non-payment of rent. It gives the tenant formal notice of the breach and an opportunity to remedy it, if appropriate, before proceedings can follow.  

What happens after a lease is forfeited?  

The tenant may still be able to apply for relief from forfeiture, which — if granted — reinstates the lease as though the forfeiture had not occurred, usually on conditions.  

What should a tenant do if the landlord has changed the locks?  

Take advice immediately. Time limits for challenging the re-entry or applying for relief can be short, and whether the landlord had a valid right to act depends on the specific facts and the conduct of both parties beforehand.  

Next reads

• How Reform of the Landlord & Tenant Act 1954 Could Affect Future Commercial Leases 
• The Landlord & Tenant Act 1954 Review: What Commercial Property Owners Need to Know

Commercial lease dispute advice 

Grant Saw's Litigation team advises landlords and tenants across London and beyond on commercial lease disputes, including forfeiture, relief from forfeiture, rent arrears, breaches of covenant and injunctions. To discuss your situation, call 020 8858 6971 or email litigation@grantsaw.co.uk. 

Disclaimer 

This article is for general information only and is not legal advice. Laws and guidance change and outcomes depend on facts. If you need advice on your situation, please contact us. Grant Saw Solicitors LLP is authorised and regulated by the Solicitors Regulation Authority.  

Last updated: 25 September 2026