Update on Law Commission review of LTA 1954 - first consultation paper published

The Law Commission published its first Business Tenancies Consultation Paper on 19 November 2024.

The Paper considers four possible models:

• no security of tenure – abolish the LTA 1954 and there be no statutory right to renewal, although the parties could still agree a contractual option to renew
• contracting in regime – the default position would be that there be no security of tenure unless the parties contract in
• contracting out regime – this would retain the current position where the default is statutory security of tenure but with some reform to the detail of the LTA 1954
• mandatory security of tenure – as when the LTA 1954 was originally enacted, there would be no ability to contract out.

There is also consideration of the scope of the Act and whether this should change, i.e. should certain types of tenancies be excluded based on the property or lease. Currently, section 43 LTA 1954 excludes certain types of tenancy and, in addition, tenancies of six months or less are generally excluded, (unless they contain provision for renewal or extension after six months or where the tenant is in fact in occupation for more than 12 months), and there is scope to reform this regardless of which model is followed, (other than one of no statutory security of tenure at all).

It is clear there is a need to find a balance between landlord and tenant interests and the Law Commission is inviting landlords, business tenants, professionals, and other stakeholders to provide their views on whether the law needs to change and which model they prefer.

The consultation questions can be found on page 65-66 of the attached Paper and I would encourage you to consider the proposals if you are a business tenant or landlord.

There is also a survey on page 98-107 of the Paper.

The deadline for response is 19 February 2025. The Law Commission will then consider the responses and plans to provide a second paper next year.