On the 28th of March 2023, the Law Commission announced that it will review the Landlord and Tenant Act 1954. This is a key piece of legislation relied upon by businesses that lease shops, offices and other commercial premises. The review will be commissioned by the Department for Levelling Up, Housing and Communities.
The Landlord and Tenant Act 1954 has provided commercial tenants with a ‘statutory right of renewal’ of commercial premises for nearly 70 years. Part II of the Act recognises that this protection is necessary for business tenants since they stand to lose any goodwill that they may have built up if they have to leave the premises when the contractual date of the lease expires.
However, the Act was originally implemented following the Second World War and was last updated 20 years ago. Therefore, any review of the Act and subsequent proposals to modify the legislation is likely to have significant implications for landlords and tenants.
Following the rise of online retail, the 2008 financial crisis and the recent pandemic, the challenges facing businesses has increased significantly in recent years leading to growing calls for laws to be modernised.
The Law Commission has stated that the Act is viewed by many as “inflexible, bureaucratic and out of date causing extra cost and delay for both landlords and tenants – as well as preventing space in high streets and other commercial centres from being occupied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.”
It is also common for landlords and businesses to exclude the security of tenure provisions, leaving many businesses without a right to a new lease.
The Law Commission wants to address these issues and their review of the Act will focus on:
- Exploring the 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.
- Seeking 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.
- Ensuring that the law is simple and works for landlords, businesses and communities.
- Making leasing clearer and more easily accessible to small businesses and community groups, reducing the growing number of vacant properties on high streets and the anti-social behaviour that comes with it.
- Fostering a productive, beneficial commercial leasing relationship between landlords and tenants.
The Law Commission has revealed that it aims to publish a consultation paper by December 2023.
If you want to speak to an expert on commercial leases, please call Nick Attwell on 01473 229200 or email Nick at nick.attwell@attwells.com.
