What Does Forfeiture of a Lease Mean?

Most people who buy flats will enter into some form of leasehold agreement with a freeholder of a development which normally includes a requirement to pay service charges, ground rent.

In an ideal world all leaseholders in a block of apartments will pay their ground rents and service charges on time, however there will be some instances where a leaseholder is either unwilling or unable to pay their service charge, ground rent or even both.

All leaseholders would have signed a covenant to ensure that they pay their bills on time and if they don’t, then the landlord can activate a mechanism known as forfeiture which basically means they can seize the property and bring a lease to an end.

In the past this was often done by means of “peace-able re-entry” however due to current eviction legislation designed to protect the rights of leaseholders, the process of forfeiture begins with an application to the court for a possession order.

This sets in motion a potentially lengthy legal process that provides every opportunity for the leaseholder to fulfil their obligations. Conditions will apply according to how much money is owed and the length of time bills have gone unpaid.

If you are considering forfeiture as a means to secure payment of service charge or ground rent arrears please contact us for advice on 0800 002 9049.