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Law Commission signals direction of business tenancy reform

04 June 2025
The Law Commission has released its interim statement on proposed reforms to the Landlord and Tenant Act 1954.  Read a summary of their provisional conclusions, with some initial thoughts from our experts.
 
  • The current contracting-out model is expected to remain.  After hearing mixed views in the industry about the proposed models of security of tenure, with most people preferring either contracting-out or contracting-in, this proposal is unsurprising.  It is likely to retain stability in the market, which will be welcomed by many, if implemented.
  • The scope of tenancy types covered by the Act is likely to stay the same - continuing to exclude e.g. agricultural and Electronic Communications Code leases. This is an uncomplicated approach and is a proposed conclusion that will retain continuity in the market.
  • The Commission is exploring greater flexibility for the short-term letting market.  It will consult, in its second paper, on extending the threshold for protected tenancies from six months to two years.  This is a move that could reshape short-term commercial lettings and offer greater agility in the market.  It would also mean that a greater proportion of leases fall without protection. We expect the Commission to seek views on how this move might impact particular parts of the economy, such as start-up businesses and SMEs.
  • The second consultation will also consider what technical reforms are necessary, including potential changes to the contracting-out procedure.  Many practitioners, occupiers and property owners will be pleased to hear that this question now comes within the scope of the Commission’s considerations. Increasing transaction speed and reducing cost, while maintaining appropriate protection for tenants, are likely to be key factors for consultation.

Earlier this year, we hosted a roundtable discussion with businesses across the real estate sector, exploring the different models within the consultation. 
 
Our Real Estate team work with a diverse range of businesses, across multiple sectors, advising at every stage of the property, project, or portfolio life cycle.  

Contact our experts if you have any queries about the consultation or require any immediate advice.

Further Reading