Chapter 12 Video: Forfeiture: ending leases and reform

Here, I am going to talk to you about the law of forfeiture—that is how a landlord faced with a breach of tenancy by a tenant can terminate that lease. This is often one of the more confusing areas for students, so that's why I wanted to talk about it in this video. Some fundamental points that you need to grasp about forfeiture—and I am going to set those out now.

Firstly, forfeiture is only available to landlords. A tenant faced with a breach by the landlord cannot rely on forfeiture. So forfeiture is only available where a tenant breaches the tenancy agreement and the landlord wants to terminate that lease.

Secondly—and this is crucial—we need to distinguish between two different types of breach: breaches in relation to money or rent, and breaches which are non-money or non-rent related. If there has been a breach related to rent—non-payment of rent—then a different process has to be followed through. There has to be a formal demand for payment and then the procedure in the County Courts Act of 1984 applies. I won’t say any more about that now, but you’ll find it in the book.

Where there has been a breach of a non-money clause or non-rent term of the lease, we look to section 146 of the Law of Property Act 1925. And this section sets out a process, a procedure. A landlord wanting to forfeit under section 146 has to serve a section 146 notice, and that notice must do three things. One, specify the breach. Two, seek compensation if the landlord wants compensation. And finally, it has to ask the tenant to remedy the breach within a reasonable period of time, if it can be remedied, if it's capable of being remedied.

Well, what's the effect of all this? Well, if the tenant does remedy the breach then there can be no forfeiture and the lease endures, continues. If, however, the tenant fails to remedy the breach, or the breach is not capable of being remedied, the landlord must wait 14 days and then can proceed to forfeit and terminate the lease.

The Law Commission has been looking at reform of the law of forfeiture for some time, and, actually, the latest credible proposals—major proposals—were in 2006. There was a report on forfeiture. It suggested a whole new statutory regime based around tenant default and giving the court powers to order and make various forms of property order. Crucially, all breaches would be treated the same, rent or non-rent.

What do you think of these forms? Well, that's for you to think about really. Reflect upon them. Would it improve the law? And also, vitally, what does the law of forfeiture tell us about the power imbalance in the landlord and tenant relationship?