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Physically taking back possession of the premises (often described as ‘peaceable re-entry’) and issuing and serving proceedings. There are two ways for a landlord to forfeit a lease. This applies where the tenant is in administration (Insolvency Act 1986, Schedule B1, paragraphs 45 and 46) where the tenant is in liquidation (Insolvency Act 1986, s130(2)) where there is a voluntary arrangement in place under the Insolvency Act (s252, for individuals and schedule A1, paragraph 12, for companies) and where a bankruptcy order has been made in respect of an individual (Insolvency Act, s285(3)).
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This will only be given if one or more of the statutory grounds is established. Where the ground for forfeiting is a breach of the tenant’s repairing obligations, the landlord must comply with the additional requirements of the Leasehold Property (Repairs) Act 1938, which require additional wording to be inserted into the section 146 notice, with provision for the tenant to serve a counter-notice claiming the benefit of the Act, in which case the landlord must go through a preliminary application for the leave of the court to forfeit.However, this does not apply where the only ground for forfeiting is arrears of rent. The landlord cannot forfeit until a reasonable time has elapsed from the giving of this notice without the breach having been remedied, where the breach is capable of being remedied. A notice must be given under s146 of the Law of Property Act 1925 which (a) informs the tenant of the breach of covenant, (b) gives the tenant a reasonable time to remedy any covenant which is capable of remedy (but need not state what that reasonable time is) and (c) requires the tenant to pay compensation for the breach.Statute has superimposed onto the contractual framework a somewhat complicated series of steps which have to be taken. It might also extend to matters which do not involve any breach of covenant, such as the entry by the tenant into some form of insolvency process. Conventionally, it will apply to any breach of covenant by the tenant, except that, where rent is concerned, the right to forfeit will usually only arise 14 or 21 days after the rent falls due. STEPS TO TAKE BEFORE FORFEITING A LEASEĬontractually, a landlord need look only to the proviso for re-entry because this sets the parameters of the landlord’s right to forfeit. The difference is that it is only where the landlord is exercising a right to forfeit the lease that the tenant can apply for relief against forfeiture: see Richard Clarke & Co v Widnall. It can be contrasted with a break clause exercisable by a landlord, which also confers a unilateral right to terminate, but not upon some default of the tenant (such as a right of forfeiture). The right must be conferred expressly: there must be a ‘forfeiture clause’ or a ‘proviso for re-entry’.
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Forfeiture is a means for a landlord to terminate a lease, in the event of some default by the tenant.