The first consultation
The current consultation asks whether the current approach of giving business tenants a right to renew by default is appropriate in the modern commercial leasehold market. If this right of renewal is to continue, the consultation sets out four different models of how that security should operate:
- Mandatory security of tenure. All qualifying business tenancies would have a right to renew and there would be no possibility to contract out of this.
- No statutory security of tenure. Qualifying business tenancies would have no right to a renewal tenancy.
- Security of tenure which the parties can contract in to. This would in essence reverse the current position, meaning that the parties would need to contract in to benefit from the protection of the right to renew.
- Security of tenure which the parties can contract out of. This is the current position and would mean no change being made.
The current consultation sets out the pros and cons for each model. It also looks at whether the current scope of security of tenure is appropriate, should more or less types of tenancy be excluded, for instance.
The consultation invites stakeholders to respond and share their views on what impact any change in scope of the Act would have on landlords and tenants, as well as their advisers, and the commercial leasehold market.
What happens next?
Stakeholders and those interested in the security of tenure provisions under the Act are invited to submit their responses on-line until 19 February 2025. The second consultation will then be published (anticipated spring/summer 2025) detailing the operation of any recommended reform or how best to achieve an abolition of security of tenure all together. Responses to these consultations should ultimately shape the Law Commission’s recommendation to Government whether the Landlord and Tenant Act 1954 needs reform, and in what form.
The Landlord and Tenant Act is a very long standing and, for many, important piece of legislation. Any reform could have significant implications for commercial landlords and tenants and even alter the commercial property landscape for years to come.
Further details of the project “Business Tenancies: the right to renew” can be found here along with the Consultation paper, a Summary Document and the link to submit your responses.
If you need assistance in understanding the Landlord and Tenant Act 1954 and the rights to a renewal tenancy, please contact our Real Estate Dispute Resolution lawyers by email or call 03333 231 580.
