How Can a Landlord Recover Possession of Commercial Property?

Key Points

A commercial landlord can recover possession through four main routes: terminating or opposing renewal under the Landlord and Tenant Act 1954, forfeiture for breach of covenant, Commercial Rent Arrears Recovery (CRAR) for unpaid rent, or negotiating a surrender with the tenant. Which route is available depends on whether the lease is protected, the nature of the breach, and the landlord's underlying purpose. Legal advice before any action is essential, because a procedural error can expose the landlord to criminal liability, waive rights, or result in a claim for wrongful eviction.

A landlord can recover possession of commercial property through four routes: the renewal procedure under the Landlord and Tenant Act 1954, forfeiture for breach of covenant, Commercial Rent Arrears Recovery (CRAR), or a negotiated surrender. Which route applies depends on the lease terms, the nature of any breach, and the landlord's purpose. Using the wrong route can waive rights or expose the landlord to criminal liability.

In a market where retail occupier demand remained at a negative net balance in Q1 2026 according to the RICS UK Commercial Property Survey, and where secondary office and retail stock carries high vacancy, landlords must also weigh whether recovering possession serves their longer-term interests.

Security of Tenure Under the 1954 Act

Part II of the Landlord and Tenant Act 1954 gives most business tenants a statutory right to remain in occupation and to request a new tenancy at the end of their lease. A tenancy is protected if the tenant occupies the premises for business purposes and the tenancy is not excluded from the Act. Where protection applies, a landlord cannot simply wait for the contractual term to expire: the tenancy continues automatically on the same terms until brought to an end by the correct procedure.

A lease can be "contracted out" of the Act before it is granted. The landlord must serve a prescribed warning notice on the tenant prior to completion, and the tenant must make a statutory declaration confirming they accept no security of tenure. Both steps must occur before the lease is executed. If done correctly, the tenant has no renewal right on expiry and the landlord can recover possession without further formality.

For protected leases, the landlord terminates the tenancy by serving a section 25 notice on the tenant, giving between six and twelve months' notice and specifying the date of termination. The notice must state whether the landlord opposes a new tenancy and, if so, which of the seven statutory grounds in section 30(1) apply. A tenant wishing to renew may serve a section 26 notice requesting a new tenancy on specified terms, triggering a two-month deadline for the landlord to serve a counter-notice if it intends to oppose.

The seven grounds in section 30(1) include discretionary grounds based on the tenant's conduct, such as persistent delay in paying rent (ground (b)) and substantial breach of other obligations (ground (c)), and mandatory grounds giving the landlord an absolute right to possession, including an intention to demolish or reconstruct (ground (f)) or to occupy the premises for the landlord's own business (ground (g)). Where the court refuses renewal solely on grounds (e), (f) or (g), the tenant is entitled to statutory compensation calculated by reference to the rateable value of the property.

Consider a Solihull landlord who owns a town-centre retail unit let on a protected lease expiring in late 2026 and wants it back as a showroom for their own business. They must serve a section 25 notice in the correct window, state ground (g), and satisfy the court that the intention to occupy is genuine and capable of being carried out. The tenant will receive statutory compensation if ground (g) is the only reason renewal is refused.

The Law Commission published a first consultation paper on reforming the 1954 Act in November 2024 and expects to publish a second paper in 2026. No changes have been enacted; the security of tenure framework remains unchanged.

Forfeiture for Breach of Covenant

Forfeiture is the right of a landlord to bring the lease to an end early because the tenant has breached a covenant. Most commercial leases include a forfeiture clause specifying that the landlord may forfeit on non-payment of rent or on breach of other conditions. Without such a clause, the right does not exist.

There are two methods of exercising forfeiture. Peaceable re-entry means the landlord changes the locks without a court order. It is fast and low-cost when it works, but section 6 of the Criminal Law Act 1977 makes it a criminal offence to use or threaten violence to secure entry if someone on the premises opposes that entry, even someone with no right to be there. Any doubt about whether the premises are genuinely unoccupied means a court order should be obtained instead.

Before forfeiting for any breach other than non-payment of rent, the landlord must serve a notice under section 146 of the Law of Property Act 1925. The notice must specify the breach, require the tenant to remedy it if capable of remedy, and invite compensation. The tenant must then have a reasonable time to comply. Only after that time has passed without compliance can the landlord forfeit. Section 146 does not apply to forfeiture for non-payment of rent.

A landlord must handle the period before forfeiture with care. Any act that acknowledges the continuation of the tenancy after the landlord has become aware of the breach will waive the right to forfeit that breach. Sending a rent demand or accepting a rent payment after discovering the breach has occurred is the most common way this happens accidentally. Once waiver occurs, a fresh breach giving rise to a fresh right to forfeit is needed before the landlord can proceed.

After forfeiture, the tenant can apply for relief under section 146(2). The court has a broad discretion, typically granting relief on terms that the tenant remedies the breach and pays costs. For rent arrears, relief is almost always granted if the tenant pays the full arrears and costs. A landlord should also consider the position of sub-tenants and guarantors before forfeiting, and whether a vacant property's holding costs outweigh the benefit of removing the tenant.

Our commercial repossession and forfeiture solicitors can advise on the full process and help you avoid the procedural pitfalls that commonly arise.

Commercial Rent Arrears Recovery

Where the tenant has fallen into rent arrears, a landlord may use Commercial Rent Arrears Recovery (CRAR) as an alternative to forfeiture. CRAR is a statutory procedure under the Tribunals, Courts and Enforcement Act 2007, which replaced the common law remedy of distress for rent. It enables a landlord to recover rent arrears, interest, and VAT by instructing a certificated enforcement agent to take control of the tenant's goods and sell them.

CRAR applies only to written commercial leases, not to licences or mixed-use premises. It covers principal rent, contractual interest on rent, and VAT on rent only. Service charges, insurance premiums, and other sums payable under the lease are excluded, even if the lease labels them as rent. The tenant must still be in occupation.

Before CRAR can be exercised, at least seven days' net unpaid rent must be outstanding at the time of both the notice of enforcement and the taking of control of goods, as set by regulation 52 of the Taking Control of Goods Regulations 2013. A landlord must authorise a certificated enforcement agent in writing and cannot issue the notice or take control of goods personally.

Once instructed, the enforcement agent serves a notice of enforcement giving at least seven clear days before goods are taken, excluding Sundays, bank holidays, Good Friday, and Christmas Day. If the tenant pays within that period, the matter ends. If not, the agent attends the premises and takes control of goods, either removing them or entering a Controlled Goods Agreement allowing instalment repayment while the goods remain on site. Goods cannot be sold for at least seven days after removal, and entry must be through an open or accessible door during normal business hours.

CRAR is particularly useful where the landlord does not wish to end the tenancy but wants to recover arrears quickly. However, a landlord who proceeds with forfeiture for the same arrears after using CRAR cannot recover twice for the same debt.

Surrender and Other Routes to Possession

Surrender occurs when the landlord and tenant agree to bring the lease to an end before its contractual expiry. An express surrender requires a deed; both parties must agree in writing and the deed must be executed with the usual formalities. On surrender, the tenant's obligations to pay future rent and comply with covenants cease, though the tenant remains liable for arrears and pre-surrender breaches.

Surrender by operation of law arises from conduct that is inconsistent with the continuation of the lease, accepted by both parties. The most common example is the tenant handing back the keys and the landlord accepting them and re-letting to a third party. The conduct must be unequivocal. A landlord who accepts keys without expressly reserving their position may find the tenancy has ended informally, leaving disputes about outstanding obligations.

Both forms of surrender require attention to any sub-tenancies. A surrender of the headlease does not automatically extinguish an underlease, and an underlessee protected by the 1954 Act will have rights directly against the head landlord.

Where a landlord and a protected tenant both want to continue the relationship but on different terms, negotiating a commercial lease renewal avoids contested proceedings and saves time and cost for both parties. Where the primary concern is unpaid rent and possession is not the goal, our commercial debt recovery service may be the more direct route.

Frequently Asked Questions

Can I change the locks without court proceedings?

Yes, in limited circumstances. Peaceable re-entry without a court order is permissible if the premises are genuinely vacant and no force is used. Section 6 of the Criminal Law Act 1977 makes it a criminal offence to use or threaten violence to secure entry if anyone present opposes it, regardless of whether they have a right to be there. Given that risk, most solicitors advise obtaining a court order unless the landlord is entirely certain the premises are unoccupied.

What is waiver and how to avoid it

Waiver occurs when a landlord, knowing of a breach that entitles them to forfeit, does something that treats the tenancy as continuing. Accepting rent, demanding rent, or sending a routine management letter after becoming aware of the breach can all constitute waiver. Once you know of a breach, take legal advice before communicating with the tenant or accepting any payment.

When is a section 146 notice needed

No. Section 146 of the Law of Property Act 1925 does not apply to forfeiture for non-payment of rent. For rent arrears, you can proceed directly to peaceable re-entry or a court claim. For all other breaches, a section 146 notice is a mandatory precondition; forfeiting without one renders re-entry unlawful.

Minimum rent arrears needed to use CRAR

A minimum of seven days' net unpaid rent must be outstanding both at the time the notice of enforcement is given and at the time goods are taken control of. This is set by regulation 52 of the Taking Control of Goods Regulations 2013. Service charges, insurance, and other sums payable under the lease do not count towards the minimum, even if the lease describes them as rent.

Can a tenant block possession recovery

A protected tenant can apply to court for a new tenancy, and the court must grant one unless the landlord proves a ground under section 30(1) of the Landlord and Tenant Act 1954. The discretionary grounds allow the court to weigh all the circumstances, including the effect on the tenant's business. Grounds (f) and (g) are mandatory but require proof of a firm and genuine intention to redevelop or occupy.

About the Author

Tahira Khan 656118 is a Solicitor in Pearcelegal's Property department, focusing on commercial property work with a residential caseload alongside it. She qualified in 2021 and has worked in property law for over ten years, joining Pearcelegal in November 2024. Tahira is regulated by the Solicitors Regulation Authority (SRA ID 656118).

Last reviewed: 2nd July 2026.