Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Forfeiture definition

What does Forfeiture mean? Forfeiture describes the loss of a right, estate or property because of breach, wrongdoing or a statutory power, so the holder’s title or right to possession ends without compensation. It is a descriptive term used across several areas of practice, with detailed rules set by legislation and case law. In landlord and tenant law, forfeiture of a lease (England & Wales and Northern Ireland) allows a landlord to end the tenancy for breach where a forfeiture clause exists. Except for rent arrears, a section 146 notice is generally required and the landlord must re-enter peaceably or obtain a court order....

Lease at undervalue: third-owner relief; AST rent rise/forfeiture

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Published by a LexisNexis Property Disputes expert

Q&As

If a lease was granted at undervalue, you are the 3rd owner, and you knew it was at undervalue, if creditors ask for an order returning the property to the original owner you cannot claim relief?

Transactions at an undervalue (TUVs) are regulated by the Insolvency Act 1986 (IA 1986). The relevant provisions are:

sections 238, 240 and 241 of the IA 1986 for companies
sections 339 to 342 of the IA 1986 for individuals

These powers are available to trustees in bankruptcy, liquidators (in both compulsory and voluntary liquidations), and administrators. They permit the office-holder to review dealings made by the insolvent person or company in the lead-up to insolvency and to assess whether assets should be recovered for the insolvent estate.

In particular, an order under:

section 241 of the IA 1986 (for companies), or
section 342 of the IA 1986 (for individuals)

cannot be made against the other party to a TUV, or any third party, where that person acted in good faith and provided value, although there is a rebuttable presumption that they did. This framework determines whether property can be restored to the insolvent estate and the circumstances in which counterparties or successors are protected from such orders...

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Web page updated on 27/05/2026

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