Review of commercial property laws: what it means for tenants and landlords

There are billions of square feet of commercial property in the UK – and more than half of it is rented, according to figures from the Property Industry Alliance.

Strict rules govern how commercial property leases are managed, but some of these date back more than 70 years. The Law Commission is conducting a review to assess if one key piece of legislation, the Landlord and Tenant Act 1954, is still fit for purpose.

Any proposed legislative reform could impact thousands of businesses. Following the publication of the Commission’s provisional conclusions in June 2025, the commercial property team at Attwaters Solicitors has put together this article to help tenants and landlords understand the proposals and what happens next.

Why was the review needed?

The Landlord and Tenant Act 1954 was designed to give businesses more security when renting a property by protecting them from eviction. The legislation was introduced against a backdrop of post-war regeneration and a shortage of suitable commercial premises.

Seven decades later, the Act continues to underpin a vast number of commercial leases in England and Wales. Although the business real estate market has changed dramatically in this time, some of the drivers that prompted the legislation remain today. For example, some real estate specialists are predicting a scarcity of prime retail and office spaces in 2025.

How does the Act protect tenants?

Under Part II of the Act 1954, a commercial tenant currently has a statutory right to renew their lease, which is often referred to as ‘security of tenure’. This means that even if a notice of eviction is served by the landlord at the end of a contract, the tenant has the right remain in the premises and apply for a new lease on broadly similar terms – although there are some statutory exceptions, such as persistent delays in paying rent. If the landlord fails to serve an eviction notice, the tenancy automatically continues.

The current legislation gives tenants and landlords the right to ‘contract out’ of this arrangement when agreeing a lease. This means a tenant gives up the automatic renewal right at the end of their term.

What are the planned changes?

The contracting out process was a key element of the Law Commission’s review. Following consultation responses from more than 160 interested parties, the Commission has provisionally concluded that it remains the right model for landlords and tenants.

The initial consultation also asked for input on the type and duration of tenancies that should benefit from the security of tenure. In its interim statement, the Commission provisionally concluded that certain types of tenancy, such as agriculture, should continue to be excluded from the Act.

The current legislation also excludes tenancies of up to six months from security of tenure rights. Based on the consultation responses, the Commission has provisionally agreed that this should be increased and will consult on the threshold being raised to two years in the second phase of its review. A timeline for the second consultation, which will focus on the technical detail of the proposed reforms, has yet to be announced. 

If you want to understand more about how the review of The Landlord and Tenant Act 1954 might impact you, then get in touch with our commercial property specialists. We support both landlords and tenants and can advise on a range of topics – from leasing and investing to underletting and developing.