Landlord and Tenant Act 1954 reform and what it means for lease renewals

We’ve previously explored the fundamentals of the Landlord and Tenant Act 1954 and how it protects commercial tenants through security of tenure. But with the Law Commission now proposing major reforms, it’s time to look ahead. In this article, we examine what the suggested changes could mean for lease renewals in England and Wales — and how landlords and tenants should prepare.

The Landlord and Tenant Act 1954 (LTA 1954) governs the relationship between landlords and tenants of commercial premises. Its principal aim is to provide business tenants with security of tenure. This statutory right allows them to continue occupying their premises even after the contractual lease has ended, subject to certain conditions.

Key features of the Landlord and Tenant Act 1954

Part II is the most significant section in practice. It provides:

• Security of tenure – business tenants have a statutory right to renew their tenancy when the fixed term expires.
   
• Grounds for opposition – landlords can oppose renewal only on limited statutory grounds (e.g. landlord’s intention to occupy, redevelopment, tenant’s breach of obligations).
   
• Lease renewal process – the Act provides a structured court-based process for lease renewal if parties cannot agree on terms.
   
• Contracting out – parties can ‘contract out’ of the Act’s protections by serving proper notice and declarations before entering into a lease.

Over time, however, the Act has drawn criticism for its complexity, outdated provisions, and limited commercial flexibility. In response, the Law Commission has reviewed the LTA 1954 in a number of reports, the most recent being in 2024.

The consultation paper

In its 2024 consultation paper, the Law Commission set out four possible reforms to Part II of the LTA 1954:

1. Mandatory security of tenure – all business tenancies would benefit from security of tenure, with no right for parties to contract out.
    
2. No security of tenure – no business tenancies would benefit from statutory protection.
    
3. Contracting in – parties could ‘contract in’ to the Act’s protections (the reverse of the current position).
    
4. Contracting out – the existing framework would largely remain in place.

The interim statement

In its interim statement on the direction of reform, published in 2025, the Law Commission noted broad agreement that the current statutory framework has become overly complex, inconsistent, and costly to apply. The interim statement highlighted three core themes to guide future legislative proposals:

1. Proportionality and simplicity.
    
2. Clarity and consistency.
    
3. Flexibility and market relevance.

Although the Law Commission stopped short of final legislative recommendations, its interim conclusions suggest a move toward a system that upholds tenant protections without undermining commercial efficiency. Final recommendations are still awaited.

What happens next

Legal practitioners, landlords, and tenants should remain attentive to developments arising from the Law Commission’s work, as any changes could fundamentally reshape commercial leasing in England and Wales.

You can follow updates and access the consultation materials via the Law Commission’s project page on business tenancies.

How our commercial property solicitors can help

Our commercial property solicitors advise landlords and tenants on all aspects of commercial leases — including lease renewals, security of tenure, and contracting out of the Landlord and Tenant Act 1954. Whether you need support with drafting, negotiating, or disputing lease terms, we’re here to help.

We have offices in London, Brighton, East Sussex and Cumbria, and work with clients across England and Wales. Get in touch with our team today to discuss your requirements.