Forfeiture of residential leases is never the easiest subject. The courts often seek to protect tenants from the ultimate sanction of losing their home or business premises. A recent case has added to the confusion. The old rule of thumb used to be: in all cases, except the non-payment of rent, a landlord needs to serve a s146 notice on a tenant before forfeiting the lease. This was definitely the case for a failure to pay service charges, which were not reserved as rent.
In the case of Freeholders of 69 Marina, St Leonards-on-Sea v John Oram & Mohammed Ghoorun, the landlord served a s146 notice where there had been non-payment of service charge (even though the service charge was reserved as rent in the lease). In his judgment, the Chancellor of the High Court no less, considered that the s146 procedure was applicable in cases of non-payment of a service charge even where the service charge was recoverable as rent. The Chancellor then gave various reasons for coming to this view. Not all commentators agree with his reasoning though.
The upshot of this judgment is that the position regarding forfeiture has become more confused. To eliminate all doubt, a landlord may be well advised to serve s146 notice even where service charges are reserved as rent.