Forfeiture in a Tough Market: A Smarter Alternative to Suing for Rent Arrears in Commercial Leases?

18th March 2026 | George Faulkner | Dispute Resolution, Property Litigation, Forfeiture

In today’s economic climate, commercial landlords are increasingly dealing with tenant arrears and difficult decisions about how best to respond.

Issuing a debt claim may seem straightforward, but in practice, it is often slow, can be expensive and recovery of money is uncertain. As a result, many landlords are reconsidering their options, with commercial lease forfeiture coming back into focus as a more decisive alternative.

Suing for Arrears

On paper, a claim for rent arrears is straightforward. However, there are risks:

Cost vs recovery: Legal costs can quickly become disproportionate. Even where a lease includes a contractual indemnity, recovery is not guaranteed given the court retains discretion on costs and may not award the full amount incurred and, ultimately, whether those legal fees are recovered depends on the ability of the tenant to pay the judgment debt.

• Delay: tenants can and do defend claims on spurious grounds (e.g., alleged disrepair) and defended claims can take a long time to resolve (in excess of 12 months), during which arrears will continue to accrue.
• Enforcement risk: A judgment is only as good as the tenant’s ability to pay. Enforcement can be uncertain and further cost is often required.
• Insolvency exposure: By the time judgment is obtained, the tenant may already be insolvent, leaving the landlord as an unsecured creditor.

A “win” on paper does not necessarily translate into cash recovery.

Why Forfeiture is Often the Better Strategic Move

Forfeiture offers a different outcome – control rather than recovery. It offers:

• Immediate possession: The landlord regains the asset and can look to re-let to a stronger tenant.
• Loss containment: It may be commercially preferable to stop the bleeding rather than pursue historic arrears.
• Leverage: The threat of forfeiture can prompt payment or meaningful engagement from tenants.

In a weaker market, these advantages are increasingly relevant.

Forfeiture Risks

Forfeiture needs to be handled carefully. The following are consideration:

• Waiver: acknowledging the existence of the lease by, for example, accepting or demanding rent after a breach can inadvertently waive the right to forfeit.
• Relief from forfeiture: Courts can grant relief from forfeiture if the tenant pays what is due, frustrating the landlord’s objective.
• Method of re-entry: Peaceable re-entry is quick but carries risk whereas court proceedings are safer but slower.
• Void risk: Taking back possession only works if the property can be re-let on acceptable terms and in the interim the landlord will assume responsibility for business rates liability

Conclusion

In a tougher economic climate, landlords need to look beyond legal rights and focus on commercial outcomes. Suing for rent arrears can seem the obvious route but forfeiture, if used strategically, can offer a faster and more decisive solution.

The law concerning forfeiture is, however, unintuitive and full of trip-hazards. If you are dealing with tenant arrears or considering your enforcement options, our property litigation team can help you assess the most effective strategy.