Skip to content

All content is available under the Open Government Licence v3.0, except where otherwise stated.

To view this licence, visit:
https://nationalarchives.gov.uk/doc/open-government-licence/version/3

or write to:
Information Policy Team,
The National Archives,
Kew,
London TW9 4DU

or email: psi@nationalarchives.gov.uk.

This publication is available at:
https://lawcom.gov.uk.

© Crown copyright

Business tenancies: Interim statement on direction of reform

Published:

Following its first consultation on the future of security of tenure for business tenants under the Landlord and Tenant Act 1954, the Law Commission is issuing this interim statement setting out its provisional conclusions about the aspects of the 1954 Act addressed in that consultation. These provisional conclusions will shape the next phase of its work, and provide the basis of the second consultation paper, to ensure the 1954 Act works for the modern commercial leasehold market.

The Commission’s first consultation paper addressed several key issues, including the following.

  1. Whether the current “contracting-out” model of security of tenure should be retained, or a different model be adopted.
  2. What types of tenancy should benefit from security of tenure under the 1954 Act.
  3. What duration of tenancy should benefit from security of tenure under the 1954 Act.

The consultation ran from 19 November 2024 to 19 February 2025. The Commission received over 160 consultation responses from a wide range of stakeholders, including landlords, tenants, professionals, and representative organisations. The Commission wishes to thank everyone who responded to the consultation for their careful and detailed comments on the different options and questions that were posed.

Provisional conclusion: model of security of tenure

The Law Commission has provisionally concluded that the existing “contracting-out” model is the right model. The arguments in favour of retaining this model were powerful, and it received the broadest support among consultees.

A significant number of consultees told us that the current model strikes the best balance between landlords and tenants. Notable numbers of consultees were also concerned that a change in model would cause unwarranted disruption to the commercial leasehold market.

Provisional conclusion: the types of tenancy that can benefit from security of tenure under the 1954 Act

Currently certain types of tenancy (such as agricultural tenancies) are excluded from the 1954 Act. The consultation asked whether the existing list of excluded tenancies is appropriate.

Consultees generally favoured keeping the current law, and the Commission provisionally agrees.

Provisional conclusion: the duration of tenancy that that can benefit from security of tenure under the 1954 Act

The 1954 Act excludes tenancies of up to six months. The consultation asked whether this is appropriate.

While views were mixed, there was support for increasing the six-month threshold to give greater flexibility in the short-term lettings market. The Commission has provisionally concluded that the six-month threshold should be increased, and, in its second consultation paper, expects to consult on increasing the threshold to 2 years.

Next steps

The provisional conclusions set out in this announcement will provide the basis of the Commission’s second consultation paper, which will focus on the technical detail of how the 1954 Act might be reformed, including potential reform to the contracting-out procedure. The Commission’s final recommendations for reform will be set out in a report, following the second consultation.

For more information about the security of tenure regime for business tenancies, and our work examining it, as well as the first consultation paper and a summary of it, see the project page.