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Head of At the instigation of the Department for Levelling Up, Housing and Communities, the Law Commission of England and Wales is set to publish a review of the Landlord and Tenant Act 1954 (“LTA”) in December 2023. The LTA was introduced after the Second World War to encourage business owners to invest funds with the peace of mind that they would have the right to a new lease in the future. This is the first review of the LTA in over two decades.
The LTA is the legislation central to business leases, providing the statutory basis for granting, renewing, and terminating commercial property leases. In addition, the LTA provides the right of security of tenure for commercial tenants, i.e. the statutory right to a new business lease, albeit subject to many exceptions.
But as things stand, a landlord can exclude security of tenure from the lease by carefully following the process designated by the LTA, a practice that’s becoming increasingly common. And lack of security is yet another concern for businesses battling a catalogue of financial pressures.
What changes might the Commission recommend?
The Law Commission says its remit is to recommend changes to develop a modern legal framework – one that’s widely used rather than routinely opted out of.
Underlying this is the need to bolster the long-term resilience of UK high streets while considering and implementing government priorities on the environment and regional investment.
Commercial property specialist Caroline Entwistle of BLB Solicitors said the review was long overdue.
“Businesses need certainty regarding the premises they trade from. But currently, there are numerous exceptions to the right to a new lease. The current legislation is a masterpiece of questionable statutory drafting, as evidenced by the vast body of case law surrounding it. This results in landlords and tenants regularly spending large sums on strategic and often conflicting legal advice. It’s no wonder proceedings take so long to resolve,” said Caroline.
“My hope is that the Commission’s recommendations will include consolidating existing case law and creating a new framework for renewal disputes sitting outside of the court system.”