30th June 2026 ❘

Proposed Shake-Up to the 1954 Act

Modern commercial office building illustrating proposed reforms to the Landlord and Tenant Act 1954 affecting business tenancies.

By Helen Hayward, Head of Commercial Property

Proposed Changes to the Landlord and Tenant Act 1954

I remember, as a trainee, the trip out to the Court to get a Landlord and Tenant Act 1954 “contracting out” Order stamped. A nice trip out for a trainee, but it was an inefficient and unnecessary process, and its simplification through the use of notices and declarations in 2004 was welcomed. Happily, once again, change to the 1954 Act is underway!

Law Commission Consultation on Business Tenancies

On 16 June 2026, the Law Commission published the second of its two consultations looking at the right to renew business tenancies and, as you’d expect, some fairly significant changes are on the table. The first consultation confirmed that “contracting out” should remain and that the threshold for excluding tenancies based on the duration of the tenancy should be extended. Broadly, the proposals in this second consultation are aimed at simplifying the process and bringing it more into line with today’s commercial leasehold market.

What Are the Key Proposed Changes Being Considered?

Simplifying Security of Tenure

  • Potential exclusion of most periodic tenancies from the Act.
  • Increase to the minimum term for new fixed-term tenancies before the Act applies (so short lettings of under 1–2 years may fall outside the Act’s protection).

Streamlining the Contracting-Out Process

  • Removal of separate warning notices and statutory declarations.
  • Replacement with a single, integrated provision within the lease itself (or, if at all, in an agreement to surrender).

Changes to Renewal Procedures

  • Possible shift in how the courts determine renewal terms towards the terms typically agreed in the market.
  • Greater consideration of environmental factors in renewal terms.
  • More cases moving to the tribunal system rather than the courts.
  • Encouragement of alternative dispute resolution.

Financial and Rent Considerations

  • Potential inclusion of turnover rents in renewal leases.
  • Changes to how interim rent is calculated.
  • Reform of the compensation provisions where a renewal is opposed on Grounds e, f or g.

Updates to the Redevelopment Ground (Ground f)

  • To reflect current construction practices (such as retrofitting and refurbishment).
  • Alignment with the Minimum Energy Efficiency Standards (MEES) regime to include works undertaken for environmental purposes.

Have Your Say on the Proposed Reforms

The consultation is open until 16 September 2026, so there’s still time for landlords, tenants and advisers to have their say!

You can find out more about Helen and our Commercial Property team here.