Security of Tenure – Is Change Coming?
It is currently a challenging commercial landscape for both landlords and tenants. The Law Commission is considering updating the 70 year old law around security of tenure under the Landlord and Tenant Act 1954 (the “1954 Act”) to make it less complicated, cheaper and quicker for parties to enter into a lease.
What is security of tenure?
Currently, business tenants have a right to renew their tenancies at the end of their term if the lease has protection under the 1954 Act and this right has not been excluded by “contracted out”. This is referred to as the tenant having security of tenure and gives the tenant a right to be granted a new lease unless the landlord establishes one or more of a limited number of statutory grounds for opposing the renewal of the lease.
However, many argue that the hoops to be gone through to “contract out” make entering into a commercial lease needlessly arduous in already difficult conditions and, further, that the provisions of the 1954 Act are outdated and not suited to our modern commercial leasehold market.
What is changing?
The Law Commission is exploring (among other things) whether:
- to retain the current “contracting out” model or adapt a “contracting-in” model or different model;
- the length of tenancies excluded from the security of tenure provisions should be increased from 6 months to two years;
- specific types of tenancies should remain excluded from the provisions of the 1954 Act (e.g. agricultural tenancies)
On 4 June 2025 the Law Commission issued an interim statement revealing that there is likely to be some modification rather than replacement of the security of tenure provisions of the 1954 Act. Accordingly, business landlords and tenants should expect procedural changes rather than major structural changes to the 1954 Act.
For specialist legal advice, please contact our specialist Commercial Property team by calling 01206 574431 or by visiting our website.