1954 Act Reform: Security of Tenure stays, but change is coming
On 4 June 2025, the Law Commission released an interim statement following an extensive consultation process on the future of security of tenure under the Landlord and Tenant Act 1954 (“the 1954 Act”). While change is underway, this statement gives an indication that the main principles of the current regime will remain firmly in place.
The 1954 Act, now more than 70 years old, provides business tenants with the certainty of remaining in occupation of their business premises and renewing their existing leases protected by the 1954 Act, unless there are statutory grounds to oppose the grant of a renewal tenancy. However, the structure of the Act has come under increasing fire for being “outdated” and “too complicated”.
Law Commission indicates core rights to remain largely intact
Security of Tenure model
The Law Commission has provisionally concluded that the model of security of tenure should remain in place and that the existing mechanism for “contracting out” of renewal rights should be retained. The consultation addressed three other proposed frameworks for reform. Broadly, consultees felt the current model strikes the right balance between landlord and tenants to avoid causing unnecessary disputes.
Tenancy types excluded from Security of Tenure
The consultation explored whether certain types of tenancies (such as agricultural tenancies and mining leases) should remain excluded from the 1954 Act. There was limited appetite for amending the list, with consultees generally favouring keeping the current law, to which the Law Commission agrees. Therefore, it has been provisionally concluded the excluded tenancies will remain as drafted.
Duration of tenancies which benefit from Security of Tenure
The Law Commission also explored whether the duration of tenancies which are excluded from Security of Tenure should be amended. Currently, the 1954 Act excludes tenancies of up to six months. Consultee views on this were mixed, with support for increasing the six-month threshold to give greater flexibility in the short-term lettings market. The Commission has provisionally concluded that the six-month threshold should be increased. In its second consultation paper, it has been considered the threshold should be increased to two years.
Modernisation of the Landlord and Tenant Act 1954: next steps
Given the Commission initially stated in the first consultation paper, that it would seek substantial evidence to justify a departure from the current "contracting-out" model (where a tenant and landlord agree to forgo the tenant’s right to renew a lease at the end of the term), its preliminary findings that not much should change are not wholly unexpected. These provisional conclusions will form the basis of the Commission's second consultation paper, the timings of which are yet to be confirmed. This second consultation will focus on the technical details of how the 1954 Act might be reformed, including potential changes to the "contracting-out" procedure and lease renewal process.
The direction of travel is seemingly clear; meaningful reform is coming but will be cautious and commercially grounded. The security of tenure regime is to be refined, not replaced, and landlords and tenants should prepare for a procedural change rather than a structural one.
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