The Landlord and Tenant Act 1954 (LTA 1954) has long provided a statutory framework governing the renewal of business tenancies in England and Wales. Part II of the LTA 1954 provides security of tenure under certain leases. A review of Part II has been in contemplation for some time. In November 2024, the Law Commission published its first consultation paper, which considers how the right to renew business tenancies is working and whether it meets the needs of business tenants and landlords.

The Law Commission consultation closes for responses on 19 February 2025. Make sure your views are heard before the deadline. You can provide your views to the Law Commission here.

Security of tenure: The current position

In this context, security of tenure amounts to the right for a business tenant to be granted a new tenancy/lease on expiry of the existing, unless the landlord can establish (potentially, via court proceedings) one or more of a limited number of statutory grounds for opposing lease renewal.

Currently, the default position is that, unless the parties follow a statutory ‘contracting out’ procedure prior to entering the tenancy/lease, business tenants are entitled to security of tenure. The contracting out procedure is set out under section 38A LTA 1954, and the requirements are strict.

The provisions of the LTA 1954 have been criticised by landlords and tenants as outdated and not well-suited to the evolving commercial market. The Law Commission’s review is therefore an opportunity for landlords and tenants to have their views heard.

Security of tenure consultation: 4 proposed models

The primary question within the first part of the consultation concerns whether fundamental change to the security of tenure regime is necessary or desirable in the modern commercial context.

Four “models” are proposed by the Law Commission, which refer to the overarching question: should business tenants be entitled to security if tenure and, if so, in what circumstances?

Providing your views to the Law Commission

The Law Commission is seeking views from landlords, tenants and professionals in the industry about which of the above proposed model they prefer. It’s also seeking views on which types of business tenancy can/should benefit from security of tenure.

Each proposed model has potential benefits and drawbacks for the parties to a tenancy. The likely impact to the market has been considered but will not be fully understood until any change takes place. Any departure from the present regime will result in significant changes to business tenancies in England and Wales. It’s important that as many stakeholders as possible put their views forward, so that any changes to the regime accurately reflect the market.

Again, you can provide your views to the Law Commission here. The consultation closes for responses on 19 February 2025.

LTA 1954: How we can support you

Considering whether, when, and how, to enter, terminate or renew commercial tenancies can be a high-stakes, and highly strategic, exercise. So too can the processes of negotiating new lease terms, vacating or obtaining vacant possession of premises, or conducting lease renewal court proceedings.

Walker Morris’ Real Estate Litigation and transactional Real Estate teams are experienced and expert in acting for both landlords and tenants in relation to all aspects of the security of tenure regime. We will be happy to provide proactive strategic and practical advice to guide you through, and protect your business’ position in connection with, any LTA 1954 negotiation, renewal or termination.

Please contact Lewis Couth, Joanne Hawkins or Charlotte Ash for further information or advice.