Law Commission Sets Out Initial Proposals to Update the Landlord and Tenant Act 1954

*The information in this blog relates to England and Wales only

Earlier this month, the Law Commission released its initial conclusions from the first phase of consultation on reforming the Landlord and Tenant Act 1954, the cornerstone legislation governing security of tenure for commercial tenants in England and Wales.

Although expectations were high for a radical overhaul, the Commission has, for now, proposed a measured approach. It recommends preserving the core framework of the current system while leaving room for selective, targeted reforms.

 Why This Matters

The 1954 Act has shaped the commercial leasing landscape for over seven decades, granting many business tenants the right to renew their leases. However, as commercial property models evolve, the Act has faced growing criticism for being overly rigid and procedurally complex, particularly for SMEs.

This review aims to ensure that the legislation is fit for purpose in a modern commercial environment.

 What Has the Law Commission Proposed So Far?

The first consultation, which closed in February 2025, received over 160 responses from landlords, tenants, legal professionals, and industry bodies. Key provisional conclusions include:

• No fundamental change to security of tenure: The Law Commission recommends retaining the existing statutory right to renew, suggesting that the framework continues to serve a valuable purpose.
• “Contracting out” remains: The current mechanism that allows parties to exclude renewal rights by agreement – commonly used in commercial leases – is to stay in place.
• Scope of exclusions unchanged: Categories of tenancy currently outside the Act (e.g. agricultural leases) will remain excluded.
• Short-term lease threshold under review: The Commission is considering whether the current six-month minimum term for security of tenure protection should be raised to two years – a significant shift that could exclude a broader range of short-term tenancies from protection.

 Industry Perspectives: Diverging Views

Some industry bodies and stakeholders, called for more ambitious reforms. Their submission proposed that leases over seven years should automatically fall within the Act’s scope, with shorter agreements handled more flexibly. They also flagged the procedural burdens of the current system – including complexity, cost, and delays – as disproportionately affecting small business tenants.

 What Happens Next?

A second consultation paper is expected later this year, focusing on the technical detail of potential reforms, including possible tweaks to the “contracting out” process itself.

Following that, the Law Commission will publish its final report with formal recommendations. It will then be up to the Government to decide whether to legislate.

 Need Advice on How This Affects You?

If you’re a landlord or tenant with a commercial lease – particularly one under two years or involving renewal negotiations – the proposed reforms may impact your rights and obligations in the near future. Our Real Estate Team is closely tracking developments and can help you assess and plan for potential changes.

Find out more about our Real Estate services here.

The information and opinions contained in this blog are for information only.  They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice.  Before acting on any information contained in this blog, please seek solicitor’s advice from Gilson Gray.