The Law Commission has launched a public consultation to evaluate whether the right to renew business tenancies, set out in Part 2 of the Landlord and Tenant Act 1954, remains fit for purpose in today’s commercial landscape. Introduced nearly 70 years ago in the post-war era, the law grants business tenants security of tenure under specific conditions but has seen few updates in recent decades.
The consultation invites feedback from businesses, landlords, representative bodies, legal advisors, and other stakeholders affected by the legislation, with a focus on whether the current framework meets the needs of modern business practices.
A changing landscape for commercial leases
The existing law allows tenants to renew their leases when they expire unless both parties agree to “contract out” of this right when the tenancy begins. While the contracting-out mechanism was introduced years ago as a significant update, the commercial leasing market has since undergone transformative changes, including shifts in how businesses operate and use physical spaces.
Professor Nicholas Hopkins, the Commissioner for Property, Family and Trusts at the Law Commission, commented:
“The existing model of security of tenure was introduced decades ago, when the commercial leasehold market looked very different from how it does today. In our first Consultation Paper, we ask whether the model is still fit for purpose, or if it’s time for a change. We are keen to hear from all of those affected by the law.”
The consultation will explore whether alternative models, such as mandatory security of tenure, contracting-in, or abolition of security of tenure, could better serve the needs of landlords and tenants alike.
Government backs reform to support high streets
The review is part of a broader effort to revitalise high streets and boost economic productivity, according to Alex Norris, Minister for Local Growth. He explained the importance of this initiative:
“We want to give local businesses the tools they need to breathe new life into our high streets and town centres. That is why we have asked the Law Commission to carry out this important work so we can bring forward a legal framework that is fit for purpose, boosting economic growth and productivity while making sure small businesses can occupy property more quickly and better understand their rights.”
The consultation will also consider whether the current categories of business tenancy eligible for security of tenure are still appropriate.
Next steps in the consultation process
The public consultation will remain open until 19 February 2025, after which the Law Commission will review the responses and formulate recommendations. A second consultation paper is expected to follow, though the timing will depend on the findings of the first phase.
For those directly impacted by the legislation—whether landlords, tenants, or advisors—this is a unique opportunity to shape the future of commercial leasing in the UK.
