2. Forfeiture

The threat of forfeiture - ‘confiscation without compensation’ is inherent to leasehold, because the leaseholder is not the owner. A freeholder under the terms of the lease has a right to threaten leaseholders with confiscation (‘forfeiture’) of their flats for breaking the undertakings in the lease (‘covenants’).

A freeholder also has the right under the terms of the lease to threaten leaseholders with confiscation for money owed as ‘rent’.


‘Forfeiture is state sanctioned theft. I have no problem with someone being required to pay a debt that they owe under an agreement into which they have freely entered. However I have enormous problems with the fact that the law allows landlords to take vastly greater sums than are owed them and turn people out of their homes’.
Andrew Selous MP HL Deb. 24/1/02, Standing Com. D c.175


Repossession by a mortgage company repays the leaseholder after taking the amount owed, but a freeholder can confiscate a whole home with no compensation - an unavoidable result of the leasehold system.

In the Commons debate on the Leasehold Reform Act in March 2002 an amendment which would have banned forfeiture, was lost.Only forty-eight MP’s from all parties voted to abolish forfeiture. Two hundred and seventy-eight MPs voted to keep it. Why ?
Hansard HC Deb. 13/3/02, Vol. 381 c.971


‘Reform of the Leasehold laws has been discussed for many years. I therefore find it hard to understand why, with only 10 minutes or so to go before the last stage of voting on the Bill, insufficient thought has been given to including in it provisions for the abolition of forfeiture, and for compensation’
David Lepper MP Hansard HC Deb. 13/3/02, Vol.381 c.968

The Leasehold System keeps the Great Landowners’ Estates intact. It is very rewarding for property developers, as well as lawyers, barristers and surveyors, and other professional advisors.Those for whom leasehold is most rewarding, also have the power to ensure it continues through professional associations and pressure groups.