Commercial tenant breaches

When a commercial tenant fails to comply with the terms of their lease, the consequences for a landlord can be significant: lost income, deteriorating premises, and the prospect of lengthy and costly legal proceedings if the breach is not addressed promptly and correctly.

What is a tenant breach of a commercial lease?

A commercial lease imposes a series of obligations on the tenant. For example, an obligation to pay rent and service charges, to keep the premises in repair, to use the property only for the permitted use, to obtain the landlord’s consent before making alterations or subletting, and to comply with any other covenants set out in the lease. A breach occurs whenever the tenant fails to comply with any of those obligations.

Not all breaches are equal. Some, such as non-payment of rent, are straightforward to establish. Others, such as whether a particular use constitutes a breach of a user covenant, or whether alterations need consent under the specific terms of the lease, require careful analysis of the lease provisions and the factual circumstances.

The most common forms of tenant breach in commercial leases include:

Non-payment or persistent late payment of rent or service charge;
Failure to repair and maintain the premises in accordance with the repairing covenant;
Carrying out alterations or works without the landlord’s consent;
Subletting, assigning, or sharing occupation without consent;
Using the premises for a purpose not permitted by the user covenant;
Failure to comply with keep-open or trading obligations;
Breach of other lease covenants, including insurance obligations, signage restrictions, and compliance with statute.

You will find answers to common questions around easement disputes in the FAQs at the bottom of this page.

What does a commercial tenant breach solicitor do?

Our property disputes solicitors have extensive experience advising commercial landlords on the full range of tenant breach scenarios, from unpaid rent and persistent late payment to unlawful alterations, subletting without consent, and failure to repair. We advise on the appropriate response to each breach, the steps required to preserve the landlord’s remedies, and how to pursue those remedies as efficiently and cost-effectively as possible. The team’s ethos is simple: solve the problem.

Our aim is always to try and resolve the dispute without court intervention, using negotiation, mediation, expert determination and other forms of alternative dispute resolution. Where that is not possible, the team has extensive experience of successfully taking claims against tenants in breach of their lease all the way to trial.

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Why choose B P Collins as your commercial tenant breach solicitors?

With over 60 years of experience, we’re consistently ranked by Chambers UK and The Legal 500 for the strength of our property disputes practice. Our solicitors have helped hundreds of commercial landlords including property investment companies, developers, institutional landlords and private individuals, navigate their property rights with confidence and clarity.
As with most disputes, early advice can frequently result in a swift outcome, avoiding unnecessary escalation and protecting your position before it becomes more difficult to assert.

Contact our commercial tenant breach solicitors today

For further information or advice please contact our commercial tenant breach lawyers. Our teams are based in London, Thame and Gerrards Cross, and can be contacted on 01753 889995 or at enquiries@bpcollins.co.uk.

Commercial Tenant Breaches FAQs

What options does a landlord have when a tenant is in breach of their lease?

The remedies depend on the nature of the breach and its severity, the terms of the lease and what outcome the landlord is seeking to achieve. Where the tenant has failed to pay rent, landlords can pursue a debt claim, to serve a statutory demand, to exercise Commercial Rent Arrears Recovery (CRAR) to seize the tenant's goods, or, where the breach is sufficiently serious, to forfeit the lease. Where the breach is a non-monetary covenant (such as a failure to repair, an unlawful alteration, or an unlawful subletting), the landlord may seek an injunction to compel compliance or restrain further breach, or may serve a section 146 notice under the Law of Property Act 1925 as a precursor to forfeiture.

What is most effective first step in commercial tenant breach?

Simply communicating the breach to the tenant and seeking they remedy the same; the direct approach can often prompt compliance without the need for court proceedings.

What is commercial property forfeiture?

Forfeiture is the right of a landlord to bring a lease to an end and recover possession of the premises as a consequence of the tenant's breach. It is one of the most powerful remedies available to a commercial landlord, but it must be exercised correctly. In many cases the right to forfeit can be lost through waiver if the landlord does anything that acknowledges the continuation of the lease (such as demanding or accepting rent) after becoming aware of the breach.

When can a landlord forfeit a commercial lease?

For breaches of covenant other than non-payment of rent, a landlord must serve a section 146 notice on the tenant before forfeiting. The notice must specify the breach, require the tenant to remedy it (where the breach is capable of remedy), and require the tenant to make monetary compensation. The tenant must then be given a reasonable time to comply before the landlord exercises the right to forfeit. For non-payment of rent, no section 146 notice is required, though the right to forfeit may still be waived if not exercised promptly. Forfeiture can be effected either by court proceedings (which is the only route where the tenant is in occupation) or by peaceful re-entry.

What is a section 146 notice?

This is a formal notice served by a landlord under section 146 of the Law of Property Act 1925 on a tenant who is in breach of a lease covenant other than the obligation to pay rent. The notice must identify the breach complained of, require the tenant to remedy it within a reasonable period (if the breach is remediable), and require the tenant to pay compensation for the breach.

When can a section 146 notice be served?

A landlord cannot forfeit a lease for a non-rent breach without first serving a valid section 146 notice and giving the tenant a reasonable opportunity to comply. A defective notice (or one served without adequate time for compliance) will not support a valid forfeiture, and could expose the landlord to a claim for wrongful forfeiture.

Can the tenant apply for relief from forfeiture?

Yes. A tenant (and in some cases a mortgagee or sub-tenant) can apply to the court for relief from forfeiture – that is, an order restoring the lease notwithstanding the landlord's exercise of the right to forfeit. For non-payment of rent, the court has a wide discretion to grant relief and will generally do so if the tenant pays the arrears and costs within a reasonable time. For other breaches, relief is available but less automatic: the court will consider the nature and gravity of the breach, whether it has been remedied, and all the circumstances of the case.

Are there time limits for tenants applying for relief from forfeiture?

Yes. From a landlord's perspective, there is no hard deadline, but delay works in the landlord’s favour – courts grow increasingly reluctant to grant relief the longer a tenant waits, particularly once a landlord has re-let or changed its position in reliance on the forfeiture. The one firm limit is in respect of rent arrears: once a possession order has been executed, the tenant has six months to apply, after which the right is extinguished.

What should a landlord do if the tenant is carrying out unlawful alterations?

Where a tenant carries out works to the premises without obtaining the landlord's consent (if consent is required under the lease) or carries out works that are expressly prohibited by the lease, the landlord's primary remedy is an injunction to restrain or reverse the breach. The landlord should act promptly: delay in seeking an injunction can prejudice the landlord's position, and in some cases the court may decline to grant mandatory relief requiring the reinstatement of the premises if the works have already been completed. Before seeking an injunction, the landlord should serve a formal notice on the tenant requiring them to cease the works (if ongoing) or reinstate the premises (if works have been completed) and should take steps to document the breach. A section 146 notice may also be appropriate as a precursor to forfeiture.

What happens if the tenant assigns or sublets without consent?

Where a lease requires the tenant to obtain the landlord's consent before assigning or subletting, and the tenant assigns or sublets without doing so, that is a breach of covenant for which the landlord has a range of remedies, including:

Serving a section 146 notice (with a view to forfeiture)
Seeking an injunction requiring the tenant to procure the removal of the unauthorised occupant, and;
Where possession is ultimately recovered, a claim for any loss suffered as a result of the breach.

However, the landlord must move promptly: accepting rent with knowledge of the unauthorised assignment or subletting may amount to a waiver of the right to forfeit. Where a lease is protected by the Landlord and Tenant Act 1954, the position on any renewal of the lease may also be affected by the existence of an unauthorised subtenant.

What is a 'once and for all' commercial tenancy breach?

A ‘once and for all breach’ is one that occurs at a single point in time and is then spent – for example, an unlawful assignment or subletting, or the carrying out of unlawful alterations. Once committed, the breach does not repeat itself.

What is a 'continuing' commercial tenancy breach?

A ‘continuing breach’, by contrast, is one that persists day by day for as long as the tenant fails to remedy the underlying non-compliance – for example, a failure to keep the premises in repair, or a failure to comply with a keep-open obligation.

What is the difference between a 'once and for all' breach and a 'continuing' breach?

This distinction matters a great deal in practice, particularly when it comes to waiver of the right to forfeit. Where a landlord becomes aware of a ‘once and for all breach’ and then does something that acknowledges the continuation of the lease (most commonly, demanding or accepting rent) the right to forfeit for that specific breach is permanently lost. The landlord cannot later change their mind. For a ‘continuing breach’, by contrast, the breach is treated as being repeated afresh each day, which means that a new right to forfeit arises continuously. A landlord who has waived the right to forfeit for a continuing breach by accepting rent can therefore still forfeit at a later date, provided they do not waive again after the next demand or acceptance of rent. The practical consequence is that landlords must act with considerable care when a breach comes to their attention. Any demand for rent (including an automated demand) issued after the landlord becomes aware of a breach of a once and for all covenant may constitute a waiver and permanently extinguish the right to forfeit. It doesn’t stop the landlord from pursuing alternative remedies but, it takes away one of the most powerful remedies available to a commercial landlord.

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