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Alice purchased a leasehold of 100 years for £100 million, yet it requires her to pay £5000pa in service charges.

After 5 years Alice starts to fall behind on her service charges and eventually accumulates 5 years worth of these unpaid charges, leaving her venerable to s146 forfeiture.

She receives a notice and the proceedings for forfeiture start in respect of these £25000 of unpaid service charges. Eventually the forfeiture prevails, and her lease of the property is forfeited.

Does Alice now lose the benefit of the remaining 90 years of her lease, while also not seeing back any portion of her originally paid £100mm?

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    Forfeit of the lease might be a clause in the lease agreement for breaching any its terms (given a reasonable opportunity for compliance). Oct 29, 2023 at 18:50
  • @WeatherVane and your point is? Oct 29, 2023 at 18:52
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    My point is that if you sign a lease agreement with that condition, then you accept the consquences of breaking its terms. And the £100m has little to do with the lease itself, except that for a new property the previous leaseholder may also have been the freehold owner. Oct 29, 2023 at 18:54
  • If they are the freeholder then they wouldn’t be a leaseholder at all. I guess you just mean the seller of the lease? Oct 29, 2023 at 19:19

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It might be different if the lease was purchased from the freeholder but generally the answer is

No. The leaseholder won't get any of their £100 million back.

The £100 million is paid to the previous leaseholder as a fee for transferring the lease and the title. You won't get any of that back if you default on the service charges by the freeholder (or their agent).

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