What is a Section 146 notice?
A notice issued under section 146 of the Law of Property Act 1925 warns a tenant who is in breach of lease covenant (other than the covenant to pay rent) of the landlord’s intention to forfeit the lease. A landlord has other routes for remedy when it comes to recovery of rent or items reserved as rent (insurance premiums, service charge or other demand, if reserved as rent). The notice must specify the breach complained of and if the breach is remediable, require the tenant to remedy it; and in any case require the tenant to monetarily compensate the landlord
The landlord must serve a section 146 before taking any steps to obtain possession. The s. 146 Notice must specify the breach complained of, and indicate that the lease will be forfeit if the breach is not remedied within a reasonable period of time. The s. 146 Notice must be served on the “lessee”, and the section makes clear that this includes any subtenant.
There are different procedural steps that need to be taken to forfeit a lease depending on the type of breach that has occurred. Where a tenant has breached a term in the lease (with the exception of payment of rent), then the landlord must serve a S146 notice if he wishes to proceed to lease forfeiture. Although a time limit is not required to remedy the breach, a failure to provide a reasonable time could lead to the forfeiture being deemed unlawful.
Forfeiture can be a very effective remedy for the landlord. The landlord may use this remedy providing amongst other things, that there is an express provision in the lease to do so.
Non-Payment of Rent
Where a tenant has failed to pay rent, such a notice is unnecessary. However, the landlord must serve a rent demand upon the tenant unless such a requirement is specifically excluded in the lease. Ie ‘to pay the rent whether demanded or note’. Here the tenant owes and must pay whether the landlord raises and issues a demand and invoice or not.
If a tenant fails to remedy the breach or satisfy a rent demand, the landlord can forfeit the lease.
Methods of Forfeiture
A landlord may forfeit the lease using either Court proceedings or peaceful re-entry. Making an application to the Court can be time-consuming and costly but it does provide the landlord with greater certainty of securing possession.
Peaceful re-entry is an alternative method of forfeiture for the landlord and is more efficient than the Court. Peaceful re-entry may only be used when the premises are empty and providing that the premises are not of mixed use, i.e. where there is no residential element to the premises.
Relief from Forfeiture
A tenant can apply to the Court for relief when a landlord has forfeited the lease. Where the lease has been forfeited for failure to pay rent, the tenant will generally be entitled to automatic relief providing the tenant pays the arrears and the landlord’s costs before a hearing.
Where the landlord has forfeited the lease pursuant to a s146 notice, the tenant can apply to the Court for relief once he has been served with the s146 notice. The Court has a very wide discretion to grant or refuse relief.
All the above issues have key legal aspects associated with them and your specific circumstances will be dependent on your lease terms and RPS always recommends you take professional advice in such circumstances. This information has been prepared by RPS as a general guide and does not constitute advice on any specific matter.
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