Section 146 Notice & Forfeiture
For non-payment of rent and most other breaches, the landlord can forfeit the lease — but must first serve a valid s.146 notice specifying the breach and (if remediable) giving the tenant reasonable time to remedy it.
Breach of Lease Covenants Solicitors
Expert legal advice for landlords and tenants when lease obligations are broken — repairing covenants, alterations, assignment restrictions, user clauses, subletting and forfeiture proceedings.
Lease Covenant Breach: Legal Advice for Landlords & Tenants
A commercial lease is a binding contract that imposes obligations — known as covenants — on both landlord and tenant. When either party fails to comply with those obligations, the other has legal remedies available. Covenant breaches range from minor technical infringements to serious failures that threaten the entire landlord-tenant relationship and may justify forfeiture of the lease.
Legal Merchant's panel of specialist solicitors advises both landlords and tenants on all aspects of lease covenant enforcement and defence throughout England and Wales.
Act Promptly — Delays Can Be Costly. Landlords who delay in responding to breaches may waive their right to forfeit or prejudice their remedies. Tenants who ignore breach notices may face forfeiture, damages claims and injunctions. Early legal advice is always recommended.
Common Lease Covenants and Their Breach
Repairing Covenants
Repairing obligations are among the most commonly litigated lease covenants. Whether a tenant is in breach depends on the precise wording of the covenant and the condition of the property:
- "Keep and maintain in good repair" — the tenant must keep the property in repair throughout the term, regardless of its condition at commencement (unless qualified)
- "Put and keep in good repair" — if the property was in disrepair at the start of the lease, the tenant must first put it into repair, then maintain that standard
- Schedule of condition — where a schedule of condition is attached to the lease, the tenant's repairing obligation is limited to the standard recorded at the start of the term
- Inherent defects — a repairing covenant generally does not require a tenant to remedy inherent structural defects in the original construction, only to repair the consequences of those defects
A landlord wishing to enforce a repairing covenant during the term must first serve a section 146 notice (under the Law of Property Act 1925) specifying the breach and requiring it to be remedied. For repairing breaches on leases with three or more years remaining, the tenant is protected by the Leasehold Property (Repairs) Act 1938 — the landlord cannot forfeit or claim damages without first obtaining court leave.
Alterations Covenants
Most commercial leases contain a covenant against making alterations without landlord's consent. Breaches arise when tenants carry out works without obtaining consent, or exceed the scope of any consent granted. Common issues include:
- Structural alterations carried out without consent (often an absolute prohibition in leases)
- Non-structural works carried out without licence for alterations where consent is required
- Works carried out in breach of licence conditions (e.g., failure to use approved contractors)
- Failure to reinstate alterations at the end of the lease where required by the licence or lease
User Covenants
Commercial leases typically restrict the permitted use of the premises. A breach of a user covenant arises when the tenant uses the property for a purpose outside the permitted use. This can have significant implications — not just for the landlord-tenant relationship, but for the landlord's ability to obtain planning permission for alternative uses in the future.
Assignment and Subletting Restrictions
Most leases restrict the tenant's ability to assign the lease or sublet without landlord's consent. An assignment without consent (where consent cannot be unreasonably withheld) is a breach of covenant but not void — it is effective to transfer the lease but entitles the landlord to forfeit. An absolute prohibition on assignment means any purported assignment is void.
Other Common Breaches
- Failure to pay rent or service charges — rent arrears are the most common breach leading to forfeiture proceedings
- Breach of keep-open obligations (most relevant in retail leases)
- Insurance covenants — failure to comply with insurance obligations or to notify the landlord of changes affecting the risk
- Landlord's covenant for quiet enjoyment — breached where the landlord unlawfully interferes with the tenant's use and enjoyment of the premises
- Landlord's repairing obligations — for parts of the building retained by the landlord
Landlord's Remedies for Breach
Damages
The landlord can claim damages for breach. For repairing breaches, damages are capped by section 18 LPA 1927 at the diminution in the value of the landlord's reversion caused by the disrepair.
Injunction
Where a tenant is breaching a negative covenant (e.g., using the property for an unauthorised purpose), the landlord may seek an injunction to restrain the breach, including an emergency interim injunction.
Specific Performance
In limited circumstances, the court may order a party to perform a covenant — most commonly used against landlords who fail to carry out repairs they are obliged to perform.
Tenant's Remedies: Relief from Forfeiture
A tenant faced with forfeiture proceedings — whether by peaceable re-entry or court proceedings — can apply to the court for relief from forfeiture. The court has a broad discretion to grant relief, typically on terms that the tenant remedies the breach and pays the landlord's costs. Acting quickly is essential: relief from forfeiture must generally be sought promptly after the landlord's re-entry.
Our solicitors act urgently for tenants faced with forfeiture, including making emergency applications for relief where a landlord has unlawfully re-entered commercial premises.
Frequently Asked Questions
For non-payment of rent, a landlord can forfeit a commercial lease by peaceable re-entry — physically re-entering the premises and changing the locks, without court proceedings. This can only be done when the premises are unoccupied (to avoid committing a criminal offence under the Criminal Law Act 1977). For all other breaches, the landlord must first serve a valid section 146 notice and, if the breach is remediable, allow reasonable time for remediation before forfeiting. Court proceedings are generally safer and more appropriate for occupied premises.
A landlord waives the right to forfeit a lease for a particular breach if, with knowledge of the breach, they do any act that recognises the continued existence of the lease — most commonly by demanding or accepting rent. Waiver is a significant trap for landlords: even accepting one month's rent after discovering a breach can waive the right to forfeit for that breach. Once waived, the landlord cannot use that breach as grounds for forfeiture, though they can still claim damages. Legal advice should be taken before accepting any rent where a breach is known.
Most breaches of covenant are remediable — the tenant can be required to remedy them (e.g., carry out repairs, reinstate alterations, cease an unauthorised use). Some breaches are irremediable — once committed, they cannot be undone. Courts have held that certain breaches — such as illegal or immoral use, or some assignments in breach of covenant — may be irremediable, meaning the landlord need not give the tenant an opportunity to remedy in the section 146 notice. The distinction is not always clear-cut and legal advice is essential.
Get Lease Covenant Advice
Fill in your details and one of our expert conveyancing solicitors will contact you with your best-priced quote. No obligation, no hidden fees.
- Free, no-obligation quote
- Competitive fixed fees
- Local, SRA-regulated solicitors
- Response within 2 hours
- No sale, no fee options available
Prefer to speak to someone?
Call Free: 0800 612 7456