Law Commission to review “inflexible” Landlord & Tenant Act 1954

The Law Commission of England and Wales has announced it will review part of the “inflexible, bureaucratic and out of date” Landlord and Tenant Act 1954.

The 1954 Act gives businesses the right to acquire a new lease of their premises after their existing one has run out – known as “security of tenure”. However, the Law Commission notes that it is now “nearly 20 years since the legislation was last reviewed”.

The review will be commissioned by the Department for Levelling Up, Housing and Communities (DLUHC), and will form part of the Government’s new anti-social behaviour action plan.

The Law Commission notes that a “large proportion of businesses” rent their warehouses, factories, shops and office spaces, rather than owning the freehold.

It adds that estimates have suggested that around half of all UK commercial property is rented.

The Law Commission said: “Those who rely on the [Landlord and Tenant] Act report that it is inflexible, bureaucratic and out of date, causing extra cost and delay for both landlords and tenants – as well as preventing space in high streets and other commercial centres from being occupied quickly and efficiently.”

A key part of the Government’s new anti-social behaviour plan is to give councils greater powers to revive their high streets by bringing empty shops back into use.

The Law Commission said that many landlords and businesses entering into leases decide to exclude “security of tenure”, leaving businesses without their longstanding right to a new lease.

Its review will explore problems with the existing law “with a view to developing a modern legal framework that is widely used rather than opted out of, and that helps businesses to grow and communities to thrive”.

The review will also seek to support the long-term resilience of high streets, by making sure current legislation is “fit for today’s commercial market”, while also considering Government priorities, including net zero and levelling up.

Commenting on the review, Professor Nicholas Hopkins, the Law Commissioner for Property, Family and Trust Law, said: “The right to a new lease has been available to many business tenants for over half a century. Whether they operate in shops, cafes, or factories, many businesses have been afforded the security of being able to continue in the same premises after their lease runs out.

“But it’s clear that the law is in need of modernisation. Parts of the current legislation are overly complex and bureaucratic, which is holding back businesses and the high streets and town centres they operate in.

“Our wide-ranging review of this aspect of the Landlord and Tenant Act 1954 is a fresh opportunity to ensure that the law is simple and works for landlords, businesses and communities.”

Minister Dehenna Davison, Parliamentary-Under Secretary for Levelling Up, said: “For too long commercial tenants and landlords alike have been held back by a legislative framework that is outdated and out of sync with the realities of the sector today.

“With this review of the legislation, we hope to remove the barriers that inhibit growth by modernising the legal framework and making sure it is fit for today’s market, supporting the efficient use of space and fostering a productive, beneficial leasing relationship between landlords and tenants.

“In achieving these goals this review will help to create a leasing framework that supports the Government’s priorities of growing the economy and aiding the regeneration of our town centres. The review will also help to make leasing clearer and more easily accessible to small businesses and community groups, reducing the growing number of vacant properties on our high streets and the anti-social behaviour that comes with it.”

The Law Commission has revealed it aims to publish a consultation paper by December 2023.

Lottie Winson