Zero Down Lease

What is a Section 146 Notice?

If you've received a Section 146 notice, or you've heard the term "forfeiture" mentioned in connection with your leasehold flat, you're probably feeling worried. That's understandable. But before you panic, here's what you need to know: residential leaseholders in England and Wales have significant legal protections, and forfeiture of a residential flat is extremely rare in practice.

A Section 146 notice is a formal warning that a landlord (freeholder) must serve on a leaseholder before they can begin forfeiture proceedings for breach of a lease covenant. It comes from Section 146 of the Law of Property Act 1925. Think of it as a mandatory "yellow card" that the landlord must issue before they can take any serious action against you.

The notice gives you the opportunity to put things right. It must tell you what breach has allegedly occurred, give you a reasonable time to remedy it (if the breach can be remedied), and may require you to pay compensation. Only after this notice has been served, and only if you fail to respond appropriately, can a landlord consider taking matters further.

This guide explains exactly what a Section 146 notice means for you as a leaseholder, the powerful protections you have, and what steps to take if you receive one.

A Simple Example

Imagine you own a leasehold flat and you've had some building work done. You've knocked through a wall to create an open-plan kitchen. Six months later, you receive an official-looking letter from your freeholder's solicitors.

The letter is a Section 146 notice. It states:

The breach: You've carried out structural alterations without obtaining the freeholder's consent, contrary to clause 4.2 of your lease
The remedy required: You must either reinstate the wall to its original condition or apply for retrospective consent within 56 days
Compensation: The landlord reserves the right to claim their reasonable costs

This is what a Section 146 notice looks like in practice. It's not an eviction notice. It's not a court summons. It's a formal warning that identifies a problem and gives you the opportunity to fix it.

In this example, you'd likely have two options: apply to the freeholder for retrospective consent (often granted for a fee) or negotiate a solution. Most situations like this are resolved without ever going near a courtroom.

Why Residential Leaseholders Have Extra Protection

Here's something that most legal guides don't explain clearly: if you own a long residential lease (typically one originally granted for more than 21 years), you have significantly more protection than commercial tenants. The law has built in multiple safeguards specifically to prevent you from losing your home over lease disputes.

Section 168: The Breach Must Be Determined First

This is crucial. Under Section 168 of the Commonhold and Leasehold Reform Act 2002, your landlord cannot even serve a Section 146 notice on a residential long lease unless one of two things has happened:

The First-tier Tribunal (Property Chamber) or a court has formally determined that you're in breach of the lease, OR
You've admitted in writing that you're in breach

This means the landlord can't simply decide you've breached the lease and serve a notice. For most covenant breaches, they must first apply to the tribunal, prove their case, and obtain a formal determination. Only then can they serve a Section 146 notice.

This protection exists specifically to prevent landlords from threatening forfeiture over disputed breaches. If you receive a Section 146 notice and there's been no tribunal determination (and you haven't admitted the breach), the notice may be invalid.

Section 81 Housing Act 1996: Service Charge Protection

If the alleged breach relates to unpaid service charges, there's an additional layer of protection. Under Section 81 of the Housing Act 1996, a landlord cannot serve a Section 146 notice for service charge arrears unless:

The amount has been agreed or admitted by the leaseholder, OR
The amount has been determined by a court or the First-tier Tribunal

This stops landlords from threatening forfeiture over disputed service charge bills. If you're challenging whether you owe the service charges claimed, the landlord must first get a determination before they can even start the Section 146 process.

Protection from Eviction Act 1977: Court Order Required

Even if a landlord serves a valid Section 146 notice, they cannot physically retake possession of your home without a court order. Section 2 of the Protection from Eviction Act 1977 makes it a criminal offence to enforce forfeiture of a residential property while someone is lawfully living there, except through proper court proceedings.

This means "peaceable re-entry" (where a landlord simply changes the locks), which is sometimes possible with commercial properties, is not an option with residential flats.

Common Reasons for Section 146 Notices

Section 146 notices can be served for most breaches of lease covenants, with one important exception: they are not used for non-payment of rent (including ground rent). Rent arrears follow a different legal process.

Service Charge or Ground Rent Arrears

Unpaid service charges are a common trigger for Section 146 notices. However, remember that Section 81 protections apply. The landlord must either have your admission or a tribunal/court determination of the amount owed before serving a valid notice. Even then, the arrears must exceed £350 or have been outstanding for more than three years before forfeiture proceedings can begin.

Unapproved Alterations

Making structural changes without consent is a frequent cause of Section 146 notices. This includes removing walls, installing new bathrooms or kitchens in different locations, changing windows, or converting rooms. Most leases require you to obtain the freeholder's written consent before making alterations.

Sub-letting Without Consent

If your lease requires you to obtain consent before sub-letting (either the whole flat or part of it), doing so without permission could trigger a Section 146 notice. This is increasingly common with the rise of short-term lets through platforms like Airbnb.

Other Covenant Breaches

Other common triggers include:

Keeping pets when the lease prohibits them
Running a business from the property
Causing nuisance or disturbance to neighbours
Failing to maintain the interior of the flat
Using the property for purposes not permitted by the lease

What to Do If You Receive a Section 146 Notice

Receiving a Section 146 notice can be alarming, but taking the right steps will put you in the strongest position.

Step 1: Don't Panic

A Section 146 notice is the start of a process, not the end. Courts are extremely reluctant to grant forfeiture of residential properties, and the vast majority of situations are resolved long before reaching that point. You have rights, time, and options.

Step 2: Read It Carefully

The notice must meet specific legal requirements. Check that it:

Specifies the exact breach complained of (including which lease clause)
Requires you to remedy the breach if it's capable of remedy
Includes any claim for compensation
References the right lease and property

A defective notice may be invalid. If the notice is vague about the breach or doesn't properly identify the lease clause, note this for discussion with a solicitor.

Step 3: Check Whether There's Been a Breach Determination

For residential long leases, ask yourself: has there been a tribunal or court determination that I'm in breach? Have I admitted the breach in writing?

If the answer to both is "no" (and this isn't a service charge matter where you've agreed the amount), the Section 146 notice may be invalid under Section 168 of the Commonhold and Leasehold Reform Act 2002. This is a significant defence that many leaseholders don't know about.

Step 4: Consider Your Options

Depending on your situation, you might:

Remedy the breach: If you can fix the problem (remove the alteration, pay the disputed amount, stop the prohibited activity), this is often the simplest solution
Apply for retrospective consent: For alterations, landlords often grant retrospective consent for a fee
Dispute the breach: If you believe you haven't breached the lease, or the notice is invalid, you may have grounds to challenge
Negotiate: Many situations can be resolved through negotiation, particularly with legal representation

Step 5: Seek Professional Advice

If the matter is serious, or if you're unsure of your position, get legal advice promptly. The Leasehold Advisory Service (LEASE) offers free initial advice to leaseholders in England. For complex matters, a solicitor specialising in leasehold law can help you understand your options and, if necessary, represent you.

Your Right to Remedy the Breach

A fundamental protection in the Section 146 process is your right to remedy the breach. If the breach is capable of remedy, the landlord must give you a reasonable opportunity to put it right before taking any further action.

What "Reasonable Time" Means

The law deliberately doesn't specify an exact timeframe. "Reasonable time" depends on the nature of the breach:

Paying arrears: Usually a matter of weeks
Stopping a prohibited activity: Could be immediate to a few weeks
Rectifying building work: Could be several months, depending on complexity
Obtaining retrospective consent: Typically 2-3 months

Case law suggests that landlords typically allow 4 weeks to 4 months depending on what's needed. If the notice specifies an unreasonably short time, this could be grounds for challenge.

Breaches That Can Be Remedied

Most breaches can be remedied. If you've carried out unapproved alterations, you can either reverse them or obtain consent. If you've sub-let without permission, you can end the sub-tenancy. If you owe money, you can pay it.

Breaches That Cannot Be Remedied

Some breaches are considered "irremediable." These typically involve one-off events that can't be undone, such as:

Illegal use of the property (e.g., drug dealing)
Immoral use of the property
Serious damage that can't be repaired
Certain breaches of absolute covenants

Even for irremediable breaches, the landlord must still serve a Section 146 notice, and you still have the right to apply for relief from forfeiture (explained below). Courts have held that even two days is insufficient notice for irremediable breaches. Five days has been held to be sufficient, giving you time to seek legal advice.

Relief from Forfeiture: Your Safety Net

Even if a landlord successfully obtains a forfeiture order, you have one final protection: the right to apply for relief from forfeiture. This is a court order that effectively "undoes" the forfeiture and restores your lease.

What is Relief from Forfeiture?

Relief from forfeiture is an equitable remedy that courts have the power to grant under Section 146(2) of the Law of Property Act 1925. It allows the court to restore your lease on terms, typically requiring you to remedy the breach and pay the landlord's costs.

When Courts Grant Relief

Courts almost always grant relief for residential leaseholders who:

Act promptly once they become aware of forfeiture proceedings
Remedy the breach (or show willingness to do so)
Pay any arrears owed
Pay the landlord's reasonable legal costs

The courts recognise that forfeiture of a residential lease would result in a massive windfall to the landlord (who would gain a valuable property) and catastrophic loss to the leaseholder. This disproportion means courts are extremely reluctant to allow forfeiture to stand.

Automatic Relief in Some Cases

If forfeiture proceedings are brought in the county court, there's automatic relief if you pay all arrears and the landlord's costs into court at least five days before the hearing. Even if you miss this deadline, any possession order must give you at least four weeks to pay. If you pay everything within that time, you automatically get relief.

Time Limits

You have up to six months from the date of forfeiture to apply for relief in the county court. However, don't wait. The sooner you act, the stronger your position.

The Forfeiture Process Explained

Understanding the full process helps put the Section 146 notice in context.

The Steps to Forfeiture

Breach occurs: You breach a covenant in your lease
Breach determination (for residential long leases): Landlord must obtain tribunal/court determination under Section 168, unless you admit the breach
Section 146 notice served: Formal warning specifying breach and requiring remedy
Reasonable time passes: You're given opportunity to remedy
Court proceedings: If breach isn't remedied, landlord can apply to court for possession
Court hearing: Judge considers whether to grant forfeiture
Relief application: Even if forfeiture is granted, you can apply for relief

Why Courts Rarely Grant Forfeiture

Courts in recent years have been extremely reluctant to grant forfeiture orders for residential properties. Judges are mindful that:

Leaseholders have often invested substantial sums in their properties
Forfeiture creates a massive windfall for landlords
The loss to the leaseholder is typically disproportionate to the breach
Alternative remedies (damages, injunctions) are usually available

The Leasehold Knowledge Partnership describes forfeiture as "the nuclear weapon in the hands of a landlord," but one that is "threatened daily" yet "rarely deployed" because of these protections.

The £350 Minimum Threshold

For service charges, administration charges, and ground rent combined, the landlord cannot begin forfeiture proceedings unless you owe more than £350 or the debt has been outstanding for more than three years.

In Summary

A Section 146 notice is a formal warning, not an eviction notice. It's the mandatory first step in a long process, and residential leaseholders have powerful protections at every stage:

Section 168: Requires breach determination before Section 146 can be served
Section 81: Protects against service charge forfeiture until amounts are determined
Right to remedy: You must be given reasonable time to fix the problem
Relief from forfeiture: Courts almost always restore leases when leaseholders act reasonably
Court reluctance: Judges are extremely hesitant to grant forfeiture for residential properties

If you've received a Section 146 notice, don't panic. Read it carefully, check whether it's valid, consider your options, and seek advice if needed. Most situations are resolved without ever reaching court.

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