Reforming the Landlord and Tenant Act 1954: Bringing commercial leasing into the modern era
For decades the Landlord and Tenant Act 1954 has been the backbone of commercial property law in England and Wales, giving business tenants security of tenure and the right to renew their leases. Whilst the Act has undergone reform in 1969 and 2003, the commercial property market has continued to evolve, and many argue that the legislation is still too complex and outdated. To tackle these concerns, the law commission has launched a consultation to explore much needed reforms that could make commercial leasing more flexible, transparent to today’s fast-moving economy.
Originally, the 1954 Act was designed to protect businesses from being forced out of their premises when their lease ended. Before this landlords had complete control over lease renewals, and tenants – especially businesses – often faced uncertainty. The act introduced “security of tenure” meaning tenants had the right to renew their leases unless the Landlord had a valid reason to refuse. This helped businesses stay in one place, build customer loyalty, and invest in their premises without fear of being displaced.
In the modern world however, the need for flexible, short term leases in many industries, combined with landlords requiring the ability to redevelop or alter properties when necessary has brought about questions regarding how fit for purpose the 1954 act is, and what could be changed. One idea is that parties should ‘opt in’ to adopting security of tenure, rather than the default opt out we have currently. This would mean the parties would have a better understanding of what it means to have security of tenure, though there is a concern that tenants would be pushed into agreeing to exclude the act in negotiations.
The law commission consultation is an opportunity to shape a fairer more modern leasing system that works for both landlords and tenants. As the discussion unfolds, stakeholders are encouraged to submit their views before the 19th of February 2025 and help create a commercial property framework that supports business growth and investment.
If you need help with your lease, please contact our Lease Advisory team.
