Commercial Tenants’ Rights: Have Your Say!

This article, written by Setfords Consultant Solicitor Michael Large, discusses the recent review of the Landlord and Tenant Act 1954 and what this could mean for commercial tenants.

Update 15th January 2025:

Today (15.01.25), the Law Commission held its first “in-person” public consultation into reform of the Landlord and Tenant Act 1954. As someone who works from home 100% of the time I felt it was worth travelling in to London for. Only about thirty other people agreed, as only about thirty other people attended!

Residential leases and leaseholders have a lot of legal protection – and rightly so. Residential leaseholders have been very vocal in standing up for themselves and protecting their rights. Commercial tenants it seems have some catching up to do. It is fair to say that the Law Commission have not had a huge take up in interest and attendance on this consultation despite its great importance. That is very disappointing because there are about one million commercial tenants in England & Wales. The vast majority of those are small businesses. This issue could potentially affect all of them. One of the options under discussion is abolition of commercial tenants rights to security of tenure altogether. If that happens it will leave commercial tenants with the least legal protection that they have had for over a hundred years.

Commercial tenants have almost no legal protection other than the 1954 Act. That is why it matters. Consumer rights laws and protections do not apply to them. The power imbalance between big institutional landlords and ordinary businesses is enormous. That’s why we have regulations and laws. That’s why the 1954 Act exists. I would urge anyone who may be affected by this issue to get in touch with the Law Commission and make their views known, and complete the survey. Full details about the consultation and the survey are available on their website:

I’m more than happy to talk to anyone who might be affected by these issues or has an issue with commercial property law. But please note that I am not affiliated to the Law Commission in any way and am attending these consultations and getting involved in this process in a personal capacity, and as a commercial property litigation lawyer.

Update 9th December 2024:

Today (09.12.24), I attended the Law Commission’s first online consultation on the Landlord & Tenant Act 1954. I was one of less than 100 consultees on the call, which surprised me somewhat. The Landlord and Tenant Act 1954 is a vital piece of legislation for both business tenants and commercial landlords. It affects about 5 million businesses in England and Wales, so any changes to it will affect many people and businesses.

For example, business tenants who enjoy the protection of the Act have a statutory right to renew their lease when it ends. One of the options currently under consideration by the Law Commission is abolishing that right. I must stress that no decision has been made yet by the Law Commission. The consultation process is open to everyone and anyone. So, it seems fair to say that more people should be having their say on this issue which could affect them and their businesses enormously. The way that these consultations generally work is that the rules are made by those who turn up and make some noise!

The Law Commission is broadly speaking looking at three options:

• Getting rid of security of tenure altogether (no tenants protected)
• Changing the current ‘contracting out’ system, which might include changing it to a ‘contracting in’ system
• Making security of tenure mandatory (all tenants protected)

They are also considering the scope of the Act and the type of tenancies and businesses that will be covered by it. One potential outcome is that even if tenant protection is not removed, various types of tenancies might still lose (or gain) protection.

There is another Consultation on 4 February 2025 and you can find details of that, including how to book, on their website by clicking here.

The Law Commission is interested in hearing from anyone who has been affected by these issues. They want to understand the way the Act is working and real experiences of it. The consultation period ends on 19 February 2025, so you only have until then to make your views and experiences known to the Law Commission. You can find the Law Commission’s website by clicking here, where you can fill in their survey and put your views forward. You can also listen to my podcast about it above.

Lastly, the Law Commission will be circulating its’ presentation from today very shortly. This is a public document, so by all means ask them (or me!) for a copy of it. When I have it, I will be delighted to forward a copy to anyone who would like it.

Original article 19th November 2024:

The Law Commission’s Consultation Paper 266 on “Business Tenancies: the right to renew, Consultation Paper 1: models of security of tenure” was published today, 19th November 2024. It is a review of the Landlord and Tenant Act 1954. This is the legislation that governs the rights of business tenants to security of tenure in the property they rent from their landlord. It is already possible to contract out of the Act, but many and possibly most business tenants have security of tenure, which gives them the right to a new lease or potentially to compensation if their landlord successfully opposes them obtaining a new lease.

You can find the paper by clicking here.

I must stress that no decisions have been made yet by the Law Commission. I am not affiliated to the Law Commission in any way but I have been involved in the consultation process.

One of the options under consideration by the Law Reform Commission is the total abolition of the Act. I think the crucial paragraph for commercial tenants is this:

“3.59 It is important to bear in mind that if security of tenure is abolished, this would not resurrect the previous system under the 1927 Act whereby tenants could claim compensation for goodwill. With the abolition of the 1954 Act, therefore, there would be less statutory protection for business tenants at lease expiry than there has been for around 100 years.”

As a business tenant you may be concerned about this, and the impact it may have on the future of your business.

You can have you say by clicking here if you think it might affect your business.

There is also a survey that you can complete about your experiences of the existing legislation, click here to view it.

If you are a commercial tenant and think it might possibly affect your business if you had “less statutory protection than there has been for around 100 years,” then you might want to take a look at this. The paper runs to 118 pages and in a short blog it is difficult to do it justice. But I must stress that ‘total abolition’ is only one of a number of options being looked at by the Law Commission. This part of paragraph 3.71 also stands out:

“…Any move to abolish security of tenure would need to suit not just today’s market, but also future (as yet unknown) market conditions. It is notable that in its 70-year history, the 1954 Act has shown sufficient resilience to endure through a number of different changes (both temporary and permanent) in the commercial leasehold market, in leasing practices and in wider society.”

It does seem a bit strange to me that as residential tenants and long leaseholders are getting more and more protections in law (which I have no problem with personally), at the same time commercial tenants could be looking at getting much less protection in law. You may disagree, and think they are businesses and so can look after themselves. But most business tenants are, after all, small and medium sized businesses. They are not huge multinational companies. Commercial landlords tend to have far more market power and negotiating strength than their tenants.

If you are likely to be affected by any of these issues, or would like to learn more, do get in touch and do get involved in the Law Commission’s consultation process.