Following the launch of the Law Commission’s eagerly awaited consultation on reform of The Landlord and Tenant Act 1954 in November 2024 (on which you can read our summary here), after collecting over 160 responses on its first consultation paper, the Law Commission has issued an interim statement, provisionally concluding that:
- The existing “contracting out” model is the right one;
- The existing list of tenancies which do not benefit from security (such as agricultural lettings) is appropriate; and
- The six-month threshold for excluded tenancies should be increased, with an expectation to consult on increasing the threshold to 2 years.
Direction of Reform
The Law Commission's interim statement demonstrates that a balance will be struck between continuity and modernisation:
- Endorsing the “contracting out” model is recognition of the market’s broad preference for a familiar framework and avoids unnecessary upheaval.
- Likewise retaining the current list of excluded tenancies preserves legal certainty.
- Meanwhile the shift to extend the threshold for excluded tenancies from 6 months to 2 years acknowledges the rise of flexible, short-term lettings, while still drawing a clear line between transient pop-ups and longer commercial commitments, arguably giving genuine start-ups more breathing-space without unduly burdening landlords.
What Next?
With abolition of security of tenure now firmly off the table, we await the second consultation paper from the Law Commission on the technical detail of reform. No date for that has been confirmed by the Law Commission as yet, although our expectation is that it will be published later this year.
That paper will cover potential reform to the contracting-out procedure, which practitioners hope will become less administratively burdensome to reduce unnecessary costs and delays caused by the current procedure, and so that the reformed Act caters for today’s high-churn high-street economy, while maintaining the statute’s core bargain of stability for tenants and autonomy for landlords. We expect it might also cover the forum for resolution, grounds of opposition, statutory compensation, lease terms and issues caused by the registration gap.
As with the first consultation paper, the Law Commission will likely require considerable evidence to effect any significant change in the regime, so all interested stakeholders will be actively encouraged to submit responses. The Law Commission’s final recommendations will be set out in a report following this consultation.
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