News just in - Law Commission interim statement on reform to the 1954 Act

Following initial consultation on the future of the issue of security of tenure provided to business tenants by way of the Landlord and Tenant Act 1954 (which closed in February), the Law Commission has finally concluded that... very little should change.

This provisional conclusion may come as a disappointment to those who were hoping for wide-spread reform, including in relation to the often complex and heavily argued right to interim rent (the rent payable by a business tenant between termination of their current lease and the commencement of their new lease).

The Commission’s interim statement (which can be found here) concludes that:

• we should keep the “contracting out” model that already exists under the 1954 Act, a) because it strikes the best balance between the parties, and b) to change it would be too disruptive to the market. The interim statement does however confirm that the second consultation paper will focus on potential reform to the process by which tenancies are contracted out
• there was limited appetite for amending the list of excluded types of tenancies; but
• currently, tenancies granted for a term of up to six months are excluded from the Act. The second consultation paper will ask whether the threshold for short tenancies should be increased, so that tenancies of up to two years would be excluded

This general reluctance for change is not particularly surprising – not least because it means we don’t have to grapple with what happens to tenancies that are currently within the Act or vice versa, and complicated transitional provisions. 

Both landlords and tenants may be relieved that they will still be able to rely on the existing framework, which has been tested through a large body of caselaw – both around the terms which can (or should) be included where parties are seeking to agree renewal leases, and also on the grounds of opposition. However, there are frustrations around a number of areas, and caselaw continues to evolve, so those may well be considered in the next stage.

On that however, parties don’t need to be concerned just yet. Even when the Law Commission publishes its report following the second consultation, it will still only be recommendations for reform – which will need to be implemented by way of legislation, if approved by government.

Watch this space!