The Law Commission’s latest proposals are designed to simplify and accelerate business tenancy renewals while bringing the process into line with the modern commercial property market. Although we welcome most of the changes, we have highlighted several areas of concern where safeguards are needed to avoid increasing disputes and to protect the interests of all parties.
Part 2 of the Landlord and Tenant Act 1954 gives most business tenants in England and Wales the right to remain in their premises and apply for a new tenancy when their existing agreement ends. This is commonly known as security of tenure.
Landlords and tenants can agree to exclude this right before a lease is granted through a formal process known as ‘contracting out’. However, aspects of the legislation are now regarded as unclear, burdensome, and out of step with current commercial practices.
Time will be needed to implement reform.
Overall, we welcome reforms that remove technical traps and align the Act with the day-to-day commercial property market. The final framework must remain practical, proportionate, and capable of adapting as leasing practices and regulatory requirements change.
Propertymark have recommended a transitional period of at least 12 months before any reforms take effect. This would give all stakeholders time to understand the new rules, review their procedures, and prepare updated agreements.
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