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Law Commission Launches Consultation for Potential Reform of Security of Tenure

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The Law Commission, an independent body that advises the Government on legal reforms, has initiated a consultation to explore potential changes to the security of tenure in commercial tenancies.

Launched on 19 November 2024, the consultation will remain open for responses until 19 February 2025. Feedback collected during this period will guide the Commission’s recommendations to the Government. The recommendations will be based on the necessity of reforming the existing security of tenure framework.

The Current Model

Under the Landlord and Tenant Act 1954 (the ‘1954 Act’), commercial tenants leasing business premises for a term of at least six months automatically gain the right to renew their lease at the end of the contractual period unless they agree to “contract out.” Detailed information on the contracting-out process and the grounds for rejecting a renewal request is available in our previous article.

The Consultation

The consultation aims to determine whether the current security of tenure model is effective and whether it should continue in its existing form or be replaced by one of four proposed models.

The Law Commission Consultation Paper and Summary outlines the following potential models:

  • Abolishing the 1954 Act entirely, removing security of tenure protections from all commercial tenancies.
  • Transitioning to an “opt-in” system for security of tenure, replacing the current “contract out” mechanism.
  • Retaining the existing “contract out” model.
  • Mandating security of tenure in all commercial leases, with no option for parties to exclude these provisions.

Additionally, the Commission is gathering opinions on whether the scope of business tenancies impacted by security of tenure should change. Key considerations include whether factors such as property use, lease duration, rent, or property size should influence the application of the model.

Next Steps

The Law Commission itself does not enact legislation. However, feedback from this consultation—and potentially from future consultations—will shape its recommendations to the Government. The ultimate decision on whether to retain, amend, or abolish the security of tenure framework lies with policymakers.

Changes to the security of tenure model could significantly affect the commercial property sector and both current and future commercial tenancies across England and Wales.

Have Your Say

Landlords, tenants, legal professionals, property experts, or anyone with an interest in commercial property are encouraged to respond to the consultation. Share your views on the proposed changes and their potential impact through the following channels:

Submit a response to the consultation [here].
Complete the consultation survey [here].

Alternatively responses can be made by email to BusinessTenancies@lawcommission.gov.uk.