Law Commission Review of Business Tenancies
The Law Commission is undertaking a review of business tenancies, in particular the Landlord & Tenant Act 1954. The Government is of the view that “complex commercial leasing rules are holding back high streets”.
The Act gives qualifying business tenants the right to stay in their premises after their existing lease has run out. This is known as security of tenure. The protected tenant, or its landlord, can then request a new lease by serving a statutory notice.
A landlord can only oppose a new tenancy if it can establish one, or more, of the seven grounds in the Act. A tenant is entitled to statutory compensation from the landlord if it opposes on certain grounds.
The lease renewal process can be complex, frequently requires input from lawyers and surveyors and can become drawn out. In fact, many parties opt out of the Act. This means the tenant has no security of tenure and no right to compensation. It also means that if the landlord offers a new tenancy the tenant has no recourse to the court to decide the terms of the lease or rent.
The aim of the Law Commission is to consider a simpler, more accessible framework which will encourage growth and the regeneration of the high street.
However, there are many other issues facing the high street such as recovering from lockdown, online shopping, Brexit, high energy bills and business rates. Is reform of the Act enough?
Posted on 05/03/2023 by Ortolan
