The end of World War II brought significant commercial and economic challenges for businesses.
The government needed to provide commercial tenants protection from eviction from their premises to allow them to maintain a level of confidence and commitment to investment across the economic spectrum, from retail and hospitality to manufacturing and industry.
The Landlord and Tenant Act 1954 provided that protection in several forms:
- It gave certain business tenants a statutory right to a new tenancy at the end of their existing tenancy.
- Landlords were unable to terminate certain business tenancies unless they could establish one or more of seven statutory grounds of opposition (such as an intention to redevelop the premises or an intention to reoccupy for the landlord’s business).
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Whilst the Act has undergone significant changes since its enactment (most notably the introduction of provisions dealing with contracting out of the Act), there have been no fundamental reforms to the regime.
That original form is now the subject of reform consultations—the key question is whether the Act remains fit for purpose in light of a new era of economic challenges.
In recent years, businesses may not have been directly impacted by a World War, but they have been forced to adapt to economic recessions, an explosion in online retail, and a global pandemic—and endeavour to address environmental sustainability.
Empirical evidence from the Law Commission suggests that these challenges have shortened lease terms.
There is an argument that this change means that such leases should be excluded from the Act – or even that the Act is redundant.
Property professionals also provide feedback that the contracting out process creates significant time, cost, and procedural difficulties, preventing properties from being let go quickly and efficiently.