Upcoming webinars - Wednesday 9 December, Property insurance: How to avoid changes in policy terms impacting on service charges.
Upcoming classroom training - Park homes. Thursday 28 January in London
LEASE training programme
For training on residential leasehold law.
Section 20 Consultation
Service charges for residential leaseholders
Tackling bad management
Courses can be fully tailored to your requirements.
- I am in dispute with my landlord but I do not want to go to Court or Tribunal. Is there an alternative?
- How can I find out what my service charge is being used for?
- My neighbours are very noisy and it is affecting the enjoyment of my property. What can I do?
- My landlord has carried out Section 20 consultation but I am still unhappy about the service charges I'm being asked to pay. What can I do?
- I own the freehold of a leasehold house. The leaseholder wants to buy the freehold. Do I have to sell it to them?
- What happens when my lease runs out?
- What happens if I breach the terms of my lease?
- My landlord has not demanded ground rent for several years. Can he still demand it?
What is forfeiture, and what recourse do leaseholders have?
A lease is a contract and therefore if a leaseholder breaches the terms of their lease, the landlord could take legal action against them. Forfeiture of the lease is the ultimate sanction a landlord could pursue in such situation. In order to gain possession of the property by forfeiting the lease it is necessary to obtain a court order. The process is commenced, generally, by the service of a valid notice under section 146 of the Law of Property Act 1925, the Notice of Seeking Possession.
A valid section 146 notice cannot be served unless the leaseholder has agreed the arrears or that the breach has occurred; or the breach or amounts due has been finally determined by the First-tier Tribunal (Property Chamber) or a court or under a post-dispute arbitration agreement. A determination becomes final at the end of any period provided for appeal and the landlord may not serve the section 146 notice until 14 days after that date.
If the breach relates to arrears, you cannot serve a valid section 146 notice where the amount of service charges, administration charges or ground rent owed (or a combination of all of these) total less than £350, or have been outstanding for less than three years. It is not necessary to serve a section 146 notice if the breach is for ground rent arrears.
A leaseholder can apply to court to seek relief from forfeiture. This means having the forfeiture set aside and the lease restored. The court has a wide discretion to grant or refuse relief, which is more likely to be exercised in favour of the leaseholder if they react swiftly, pay any arrears, remedy any breaches of covenant and pay the landlord’s costs.
You may require the services of a solicitor. See the directory of leasehold practitioners.
More information you might find useful:
- What is a section 146 notice?
- Service Charges and other issues: Forfeiture and possession
- Application to the First-tier Tribunal (Property Chamber): Forfeiture
- Application Form - Application for an Order That a Breach of Covenant or a Condition in the Lease has Occurred
- More Frequently Asked Questions on Breach of Lease
Still not found the answer?
Contact LEASE to have your enquiry dealt with by one of our experienced advisers