Forfeiture is the means by which a landlord can bring to an early end a contractual tenancy or lease granted for a fixed term provided that the right to do so is stipulated in the tenancy document.

An exception is section 139(1) of the County Courts Act 1984 which provides that if six months' rent arrears are outstanding and there are insufficient goods on the premises to cover the arrears, proceedings can be issued notwithstanding the absence of a right to do so in the lease.

Under section 2 of the Protection From Eviction Act 1977 the right to forfeiture of an occupied dwelling house can only be exercised by applying to the court.A landlord can forfeit a lease for breaches of positive and negative covenants in the lease.

Where the breach is for rent arrears a landlord must generally make a formal written demand before issuing proceedings although this rule is often excluded by a provision in the lease stipulating that the landlord can re-enter 'whether the rent has been lawfully demanded or not'.

Before commencing forfeiture proceedings for breach of any other covenant in the lease, the landlord must comply with section 146 of the Law of Property Act 1925: a breach of covenant is unenforceable unless and until the landlord serves a notice specifying the breach complained of, requiring the lessee to remedy the breach (if remediable), and requiring compensation in money for the breach.

If the lessee fails to remedy the breach and to pay compensation in a reasonable time the landlord's cause of action arises.When faced with an action for forfeiture a tenant can apply for relief before or after proceedings are commenced, so a tenant can seek relief on being served with a section 146 notice.

If an order for forfeiture is granted a tenant can apply for relief to the court in which proceedings were brought.

Where the ground for forfeiture is non-payment of rent section 138 of the County Courts Act 1984 applies, as amended by section 55 of the Administration of Justice Act 1985.

Section 138(2) provides that if all the rent arrears and costs are paid into court at least five days before the retu rn date, being the date first fixed for the hearing of the action, the tenancy remains intact.

Section 138(3) provides that if the court makes an order on the basis of rent arrears possession must be postponed for at least four weeks and if, during this period, the tenant pays all rent arrears and costs, by virtue of subsection (5) the contractual tenancy continues.Under section 138(9A) a tenant may apply for relief within six months of the landlord recovering possession and, if granted, the original tenancy subsists.

Underlessees have a right to apply for relief under section 138(9C).Where the breach complained of is other than for non-payment of rent the position is covered by statute and, in particular, section 146(2) of the Law of Property Act 1925 which gives the tenant the right to apply to the court for relief.

The court is given wide powers on hearing the application, including the power to make orders on terms.

The rights and powers under section 146(2) apply both where the tenant claims relief in the landlord's action and where he brings an action of his own, for example on the landlord peaceably entering premises not let as a dwelling.

The tenant's right to apply for relief lasts until the landlord obtains an order for and obtains actual possession but if the order is set aside or reversed on appeal the tenant may still apply.If the breach is of a positive covenant, for example to keep premises in good repair, that is usually remediable in a reasonable time, but breaches of negative covenants are generally incapable of remedy although there have been exceptions where relief has been granted.

The court has a wide discretion to grant or refuse relief from forfeiture on taking into account all the circumstances of a case.

Relief may be granted even in cases where there has been a serious breach.

Where a tenant has remedied a breach compensation will be payable only if the landlord has suffered an actual loss and here it will be calculated on the same basis as in an action for damages for breach of covenant.

A court is unlikely to grant relief from forfeiture in cases of deliberate breach.The right to apply for relief from forfeiture exists not only for the benefit of the tenant but also for the benefit of underlessees and mortgagees and CPR Schedule 2 CCR Order 6 section 3(2) provides that the claimant must identify in the claim form the name and address of anyone entitled to apply for relief from forfeiture under section 146(4) of the Law of Property Act 1925 or under section138 (9C) of the County Courts Act 1984 and provide copies for service on them.

Under section 146(4) of the Law of Property Act 1925 an underlessee can apply for relief from forfeiture for breach of the covenant to pay rent and also in respect of other breaches of covenant.The court may order that the remainder of the term of the lease, or a lesser term, is vested in the underlessee.

However, underlessees can also choose to apply under section 146(2) which would obviate the need for a new tenancy to be vested in them.

The position of mortgagees under a charge by way of legal mortgage is that, provided that they indemnify the lessors against the costs of the action, they can also obtain relief under statutory provisions as they are treated as holders of a subterm less one day by section 87(1) of the Law of Property Act 1925.A further category of party can apply for relief from forfeiture, namely a judgment creditor in whose favour a charging order had been made imposing a charge on a leasehold interest of the judgment debtor.

This principle was established in Ladup Ltd v Williams & Glyn's Bank plc and Another [1985] 2 All ER 577 and recently considered by the Court of Appeal in Croydon (Unique) Ltd v Wright (Crombie and another intervening) (The Times, 24 August 1999).

Under section 3(4) of the Charging Orders Act 1979 'a charge imposed by a charging order shall have the like effect and shall be enforceable in the same courts and in the same manner as an equitable charge created by the debtor under his hand'.

The judgment creditor can apply to the court for an order for sale or for the appointment of a receiver for, as an equitable chargee, he has neither legal estate nor the right to take possession or foreclose.To assist, section 90 of the Law of Property Act 1925 empowers the court to create in favour of the chargee a legal term of years absolute to enable him to carry out a sale as if the charge had been created by deed.

In Ladup the plaintiff judgment creditor was granted relief from forfeiture as it was held that it was a person interested in the lease under section 146(4) by virtue of the charging order.

In the Croydon case the Court of Appeal held that a judgment creditor with the benefit of a charging order had 'an interest under a lease derived from the lessees interest thereon' within section 138(9C) of the County Courts Act 1984 and was therefore entitled to apply for relief in possession proceedings.The creditors were not served with the proceedings pursuant to CCR O6 R3(2) and were entitled to have the order set aside.

The order was defective, as it did not postpone possession for at least four weeks under section 138(3).

The application for relief should have been made within the six months permitted by section 139(9A) so merit in the application would have to be shown.

As the outstanding rent and costs amounted to £653, the lease was worth £70,000 and the judgment debt was £233,888, this test was satisfied.