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A Notice of Breach of Covenants is served on a tenant who is in breach of a covenant under their lease to require them to remedy the breach. Notices of Breaches of Covenants are the first step in forfeiting commercial leases. A Notice of Breach of Covenants is also known as a 'Section 146 Notice', which references the relevant section of the Law of Property Act 1925.
For use in England and Wales only.
Use this Notice of Breach of Covenants:
to give notice to a tenant that they are in breach of their Commercial lease
to inform the commercial tenant that the breach must be put right
if your lease contains a forfeiture clause, to take the first step to forfeit the lease if the breach is not rectified
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To:
at , .
(the Tenant)
From:
at , .
(the Landlord)
Re: Premises at , (the Property) as stated in a lease dated and made between and (the Lease).
DATE:
WE GIVE YOU NOTICE that you are in breach of the following covenants in the Lease:
You must remedy the breach(es) within a reasonable time so far as it is or they are capable of being rectified.
If you fail to comply with this notice we will re-enter the Property in accordance with clause of the Lease and claim damages for the breach(es) of covenants listed above.
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This Section 146 Notice template covers:
details of the tenant’s breach
the formal requirements that must be met for the Notice of Breach of Covenants to be valid
a request for compensation
Use this Notice of Breach of Covenants if you become aware that your commercial tenant is breaching a covenant of their Commercial lease. If the lease is for a fixed term and the commercial tenant is not in rent arrears, issuing a Notice of Breach of Covenants is the simplest way to take formal legal action with a view to forfeiting (ie ending) the lease.
A Notice of Breach of Covenants provides details of the breach, informs the tenant how to rectify the breach and outlines any potential compensation due to the landlord.
For more information, read Dealing with breaches of covenant and How to terminate commercial leases.
In essence, a covenant is a rule contained in a Commercial lease that sets out the obligations of a tenant (or leaseholder) under the lease. Covenants can be restrictive (ie they can prohibit certain things, like allowing animals inside the property or installing hardwood flooring) or positive (ie they can require certain steps to be taken, like cleaning windows every six months or replacing blown light bulbs). For more information, read Restrictive covenants for property.
The most common type of covenant breach is non-payment of rent. However, the non-payment of rent does not require a Notice of Breach of Covenants. For the purposes of a Notice of Breach of Covenants, covenant breaches often involve:
tenants making changes and alterations to the property without the landlord’s consent
tenants removing carpets and installing hardwood flooring
the non-payment of service charges (if these are separate from the rent)
noise complaints
allowing animals on the property (this is, however, more common in residential tenancies)
issues related to parking spaces
leaks or damage to the property caused by the tenant’s negligence
repairing obligations (although these usually relate to the landlord)
sub-letting parts or all of the property without the landlord’s consent
A Notice of Breach of Covenants should give a tenant a reasonable period of time to rectify (ie fix) the breach. What is considered 'reasonable' will vary depending on the specifics of the situation. For example, more time will need to be given to a tenant to repair significant damage than to remove their vehicle from another tenant's parking space.
For more information, read Dealing with breaches of covenant.
Initially, commercial tenants are expected to rectify any breaches of their covenants without being told or after being asked informally. If they fail to take adequate remedial action, you can serve them a Notice of Breach of Covenants formally requesting that the breaches be fixed. If, after receiving a Notice of Breach of Covenants the breaches are not rectified (either within a reasonable timeframe or by the date set out in the Notice), the tenant’s lease is deemed to be forfeited. This means that you retake possession of the property. For more information on forfeiture, read How to terminate commercial leases.
A Notice of Breach of Covenants cannot be used where the commercial tenant has failed to pay the rent. However, this does not mean that you cannot regain possession of the commercial property. In situations involving rent arrears, a Notice of Breach of Covenants is not needed to forfeit the lease. For more information on forfeiture for non-payment of rent, read How to terminate commercial leases. For more information on how to recover unpaid rent, read Commercial Rent Arrears Recovery (CRAR).
Once the Notice of Breach of Covenants has been served, you should ensure that your commercial tenant has:
received the Notice and understood how the covenant has been breached, and
been provided with a reasonable amount of time for the breach to be remedied
You may also be able to request compensation as part of the Notice of Breach of Covenants. If the tenant fails to put right the breach, you can take steps towards forfeiting the lease, repossessing the property and claiming compensation. Read How to terminate commercial leases for more information and Ask a lawyer if you have any questions or require assistance.
Making a Notice of Breach of Covenants online is simple. Just answer a few questions and Rocket Lawyer will build your document for you. When you have all of the details prepared in advance, making your document is a quick and easy process.
To make your Notice of Breach of Covenants you will need the following information:
Party details
What are the details of the current landlord (eg their name and address)?
What are the details of the current tenant (eg their name and address)?
Lease
What is the address of the commercial property?
What was the start date of the Commercial lease?
Who was the original landlord to the lease:
The current landlord?
Another landlord? If so, what is their name?
Who was the original tenant to the lease:
The current tenant?
Another tenant? If so, what is their name?
Is there a guarantor to the lease? If so, what is their name?
Covenants
What are the details of the covenants in the lease that have been breached?
Do you know how long it should take the tenant to correct the breach?
If so, by what date must the tenant remedy the breach(es)?
What is the clause number in the lease that allows you to re-enter the property?
Signature
Is the Notice of Breach of Covenants being signed by:
The landlord?
An agent acting on behalf of the landlord? If so, what is their name?
Section 146 Notices notify commercial tenants that they have breached their lease and are the first step in forfeiting commercial leases. To achieve this, this Notice covers:
Under s146 of the Law of Property Act 1925
The start of the Notice of Breach of Covenants identifies the legal basis of the Notice (ie section 146 of the Law of Property Act 1925). The start of the Notice also includes the details of the relevant parties (ie the commercial landlord and tenant) and the property and lease to which the Notice relates.
We give you notice…
The body of the Notice sets out which covenants the tenant has breached and requests that the breaches are rectified. Such rectifications should always be done within a reasonable period of time, but the Notice may specify a specific date.
The Notice also details the consequences of the tenant not rectifying the breach (ie the lease being forfeited).
If you want your Notice of Breach of Covenants to include further or more detailed provisions, you can edit your document. However, if you do this, you may want a lawyer to review or change the Notice of Breach of Covenants for you, to make sure it complies with all relevant laws and meets your specific needs. Ask a lawyer for assistance.
Check whether your lease contains a forfeiture clause
As a landlord, you can only end a commercial lease by forfeiture if your Commercial lease contains a forfeiture clause and this clause allows you to end the lease in respect of the specific breach that has occurred. A forfeiture clause is a clause that allows you to forfeit (ie end) the lease early.
Before sending your Notice of Breach of Covenants, carefully review your lease to see whether it contains a forfeiture clause covering the type of breach the tenant has committed. If your lease does not contain an applicable forfeiture clause, you won’t be able to forfeit the lease. For more information, read How to terminate commercial leases. Ask a lawyer if you have any questions or concerns.
Understand when to seek advice from a lawyer
Ask a lawyer if:
your tenant has not paid their rent
your tenant has not repaired the property when required to do so
this document doesn’t meet your specific needs
