Law Commission calls for views on reform of commercial leasehold and business tenancies laws
The Law Commission today launches consultations on wide-ranging reforms of the law relating to commercial leases to benefit tenants and landlords in England and Wales. The consultations are available on the business and tenancies project page and the commercial leasehold project page.
The generational reforms will support millions of businesses – operating from shops, restaurants, warehouses and many other locations – by ensuring the law is fit for a modern commercial leasehold market.
Landlords and tenants face unnecessary obstacles which stand in the way of commercial transactions. This is bad for business, creating barriers to productivity and preventing commercial space, including on our high streets, from being occupied quickly and efficiently.
For decades the law has not kept pace with changes in the commercial leasehold market. It is creating uncertainty, wasted costs, delays, and frustration for tenants and landlords.
Business tenants are entitled to renewal tenancies, which enable them to stay in their premises for longer (unless they opt out of that right). This regime is not working as it should. Those choosing to opt out must follow a convoluted procedure, involving unnecessary expense and delaying when a business can start to trade from premises. The problems are made worse because the regime captures short-term tenants who are unlikely to expect a renewal tenancy. Where business tenants claim a renewal tenancy, the law can produce unfair outcomes.
In other areas, legal protections for tenants introduced in the 1980s and 1990s – including flat owners’ right of first refusal where their landlords plan to sell – are not working as intended. They are preventing sensible commercial leasehold transactions and causing needless bureaucracy and risk.
The Law Commission’s work will benefit tenants and landlords, creating a framework that is fit for purpose. It will allow business tenants to focus their attention on their businesses, and maintain important protections both for business tenants and residential flat owners. The impact of technological advances, societal changes, environmental concerns and new types of development are all being considered.
We are consulting on removing unnecessary obstacles in commercial leasehold transactions and setting out detailed proposals to modernise the right of business tenants to a renewal tenancy.
Our proposed reforms will affect a significant number of businesses in England and Wales and we are keen to hear from as many people as possible in response to our consultations.
The consultations run until 16 September 2026. The Commission would like to hear from tenants, landlords, their representative bodies and advisers, and anyone else interested in the topics.
The consultations are available on the business and tenancies project page and the commercial leasehold project page.