Forfeiture of residential leases to be banned

This article considers the fundamental reshaping of the landscape of leasehold enforcement by abolishing forfeiture of residential leases.

On 27 January 2026, the Ministry for Housing, Communities and Local Government published the draft Commonhold and Leasehold Reform Bill. We have previously commented on the proposed changes: Commonhold and Leasehold Reform…the final frontier?

This article looks further at Part 4 of the Bill, which proposes the abolition of forfeiture of residential leases, a powerful yet controversial remedy available to landlords. It introduces new statutory enforcement measures in its place said to be fairer and more proportionate.

The Framework

Section 137 introduces the concept of a “lease enforcement claim”; a new route for landlords to seek remedies for breaches of lease covenants.

Section 138(1) removes existing forfeiture rights, providing that “A long residential lease may not be terminated on the grounds of a breach of a covenant of the lease” and Section 138(2) confirms that any existing forfeiture provisions (implied or express) will be unenforceable.

Section 139 clarifies the type of leases that are within the new scheme. A "long residential lease" is one being over 21 years or a lease granted under a statutory scheme of a "residential property". Notably, it clarifies that shared ownership leases will fall within this definition; often a point of uncertainty since the decision in Avon Ground Rents Limited v Canary Gateway (Block A) RTM Company Ltd [2023] EWCA Civ 616,Subsections (6) to (10) deal with special cases. (We have previously reported on this case: The changing landscape of shared ownership leases)

Lease Enforcement Claims

Preconditions

In order to bring a 'lease enforcement claim', a landlord must first satisfy all seven preconditions contained in Section 141:

1. The lease must be a post-commencement lease or if a pre-commencement lease and the landlord would be entitled to forfeit the lease but for section 138.
2. The tenant must have first received the prescribed explanatory statement – the form of which will be the subject of secondary legislation – which notifies them that a breach has occurred and outlines the statutory scheme.
3. The landlord must have the legal right to enforce the covenant relating to the breach – it is assumed that this will exclude those breaches that have been waived.
4. The breach must not be an "excepted breach" (as detailed at section 143).
5. The breach must either be non-monetary, or, if it is monetary, either the unpaid amount must exceed a certain threshold or be overdue for a certain period. Whilst the threshold itself will be the subject of secondary legislation, Section 144 confirms that the threshold must be set between £500 and £5,000.
6. Similar to current limitations imposed by the Housing Act 1996 and Commonhold and Leasehold Reform Act 2002, before enforcement proceedings can be brought, the breach must be admitted by the leaseholder or determined by a Court or Tribunal.
7. A lease enforcement notice, which confirms that the landlord has complied with the preconditions, must have been served, and the tenant must be given a final opportunity (of at least 28 days) to remedy the breach.

Excepted Breaches

The Bill sets out specific breaches that are excluded from the scheme:

1. Denying or disclaiming the landlord's title;
2. Non-payment of ground rent;
3. Insolvency;
4. Death; or
5. Incapacity

Remedies

The remedies that can be ordered in an enforcement claim are ultimately at the Court's discretion, provided it is appropriate and proportionate, however the Bill outlines two orders the Court can make:

1. A remedial order requiring the tenant to take specified action to remedy the breach within a specific period; or
2. An order for sale of the Property.

When deciding what order to make, the Court must have regard to conduct of the parties; seriousness and remedy of the breach; likelihood of compliance; and impact on interested parties.

Costs

Sections 152 and 153 of the Bill introduces a cost recovery framework in respect of lease enforcement claims and sets out the circumstances in which a costs order can be made, alleviating landlord's concerns in light of those restrictions on litigation costs contained in the Leasehold and Freehold Reform Act 2024.

Forfeiture has long been a controversial remedy, and its proposed abolition shows a fundamental shift in favour of leaseholders.

The Bill recognises however that enforcement tools are a necessary reality of multi-occupied buildings, although this new system offers a more proportionate and structured approach. In particular, increased judicial oversight means that the scales will be more balanced between leaseholder and landlord.