Author17th October 2025 | Claire Chillingworth | Commercial Property, Real Estate, landlord and Tenant Act 1954
A little refresher…
It’s pretty widely known that the Landlord and Tenant Act 1954 (LTA 1954) grants “security of tenure” to commercial tenants – i.e. commercial tenants (with a few exceptions) have the right to renew their leases when the contractual lease term comes to an end.
However, landlords and tenants can agree to exclude (or “contract out”) that security of tenure when they enter into their agreement for lease or lease by following a (slightly clunky) process. If security of tenure is excluded, the tenant does not have the right to a new lease at the end of the lease term.
What’s happened this year?
The LTA 1954 has been under a microscope this year as The Law Commission consulted on whether to reform it. As a 70+ year old, post war, piece of legislation, with a dramatically different market now from when it was enacted (co-working spaces, increasing hybrid working and pop up retail to name just a few things), it’s not surprising that it may need a refresh – the question is, how extensive should that rethink be (spoiler: not all that extensive as it happens!).
The Consultation
The Law Commission closed its first consultation earlier this year. The Commission received over 160 consultation responses from a wide range of stakeholders, including landlords, tenants, professionals and representative organisations.
The consultation covered a range of questions, including:
- Whether the current “contracting-out” model of security of tenure should be retained, or a different model be adopted. Different models considered including mandatory security of tenure, abolishing security of tenure, or switching to a “contract-in” rather than “contract-out” system.
Law Society’s provisional conclusion: Retain the current model. Responses were overwhelmingly in support of this; saying that the current model strikes a balance between landlords and tenants and that to change it would unnecessarily disrupt the market.
- What types of tenancy should benefit from security of tenure under the LTA 1954.
Law Society’s provisional conclusion: The current structure is correct – i.e. the list of tenancies that are not able to benefit from the security of tenure provisions is correct. This list includes agricultural tenancies, mining leases and short-term tenancies (although – see below on those).
- What duration of tenancy should benefit from security of tenure under the LTA 1954.
Law Society’s provisional conclusion: As mentioned above, short-term tenancies are automatically excluded from security of tenure. Currently, a short-term tenancy for this purposes means a tenancy of up to six months. The consultation asked whether this threshold is appropriate.
The Commission reported that responses on this point were mixed, but generally there was support for increasing the threshold to give greater flexibility in the short-term lettings market. As a result, the Commission plans to hold a second consultation on extending the threshold to two years.
A few thoughts
The provisional conclusions do not indicate a sweeping change to the LTA 1954. The Law Commission’s approach is a pragmatic one along the lines of not breaking something that (on balance) is working.
Having said that (at least from lawyers on the front line, and clients who pay them!), there is a growing frustration with the convoluted aspects of the security of tenure process with its notices, counter-notices, statutory declarations and rigid timelines. At the very least, it would be good to see a more streamlined and modernised process given the age of technology that we are increasingly experiencing.
Next steps
The Law Commission will consult again later this year with a final report to the Government expected in 2026. This consultation will focus on its provisional conclusions from the first consultation and may go into more detail about what any proposed changes would actually look like and whether any transitional rules will be required.
As ever, the devil will be in the detail (and also whether, and how quickly, resulting legislation makes it through to the Government’s agenda).
Until then, we will watch the space….
If you have any questions, or want to find out more. Contact our Commercial Property team, or Claire Chillingworth.
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