Commercial leasehold
A review of aspects of the law relating to commercial leasehold.
Background (Back to top)
Our project, Business Tenancies: the Right to Renew, is addressing one aspect of commercial leasehold law, but there are other issues in the commercial leasehold sphere which this project will review.
First, we have heard that two aspects of the law are causing significant problems in practice for commercial leasehold transactions, creating barriers for businesses, preventing commercially sound transactions and imposing needless bureaucracy.
Secondly, we have heard about the law governing the maintenance, repair and upgrading of leased commercial buildings. There is concern that the law in this area is causing confusion and unfairness, and that it is has not kept pace with modern priorities (such as the need to improve the environmental sustainability of buildings or to reinvigorate the high street).
This project forms part of the Law Commission’s 14th Programme of Law Reform.
Project (Back to top)
First sub-project
The first sub-project is a focused review of two aspects of the law relating to commercial leasehold transactions:
(1) issues with the Landlord and Tenant (Covenants) Act 1995; and
(2) rights of first refusal under the Landlord and Tenant Act 1987 (in so far as the law relates to commercial premises).
First sub-project: Terms of Reference
Our Terms of Reference, agreed with the Government, require the Law Commission to conduct a focused review of two areas of law which cause problems for commercial leasehold transactions:
- Landlord and Tenant (Covenants) Act 1995: the project will examine whether aspects of this Act – in particular, the anti-avoidance provisions – are standing in the way of commercially important transactions.
- Landlord and Tenant Act 1987: the project will review whether aspects of this Act are creating unnecessary confusion or bureaucracy for transactions involving commercial property – in particular, whether the grant of leases of commercial units in mixed-use premises should be excluded from the rights of first refusal given to residential tenants.
The Commission will consider reforms with a view to:
- streamlining commercial leasehold transactions;
- decreasing bureaucracy, delay and costs;
- reducing confusion about how the law applies; and
- aligning the reforms to the wider review of the Landlord and Tenant Act 1954 and ensuring that reforms collectively (when considered alongside reforms under the 1954 Act project) support the objectives of that review.
Certain aspects of the law are outside the scope of the project, including residential leasehold law.
Our full Terms of Reference are available.
Second sub-project
The second sub-project will be a scoping project, focusing on the law governing the maintenance, repair and upgrading of leased commercial buildings. As part of this scoping work, we will consider the law relating to dilapidations, service charges, and the interaction between environmental frameworks and commercial leasehold law. Scoping work will enable us to understand the problems that exist and to test which might have a law reform solution.
Further detail about the second sub-project will be included on this webpage when the sub-project commences.
Next steps (Back to top)
First sub-project: We expect to publish a consultation paper in spring 2026.
Second sub-project: Further steps and their timings will be confirmed in due course.
Documents (Back to top)
First sub-project
Terms of reference – first sub-project
Second sub-project
There are no documents published as part of this sub-project currently.
Contact (Back to top)
Contact us if you have any queries about this project.