Security of tenure reform in England and Wales: what's next for the 1954 Act?

In the English and Welsh commercial property sphere, there has long been discussion about the potential reform of the Landlord and Tenant Act 1954 (“1954 Act”), the legislation that governs security of tenure for business tenants. The latest development in this process came on 16 June 2026, when the Law Commission published their second consultation paper into Part 2 of the 1954 Act. This followed the Law Commission’s interim statement from June 2025, which provisionally concluded that the current contracting-out model for security of tenure should remain, and that the threshold for excluding tenancies from the scope of the 1954 Act based on the tenancy’s duration should be increased.

The second consultation paper intends to build on the conclusions drawn from the first stage of the consultation and will look in more detail at how the 1954 Act should operate in practice. The Commission is consulting on a wide range of issues across the 1954 Act including:

1. Reforms to qualifying criteria, including whether to exclude the majority of periodic tenancies from the scope of the 1954 Act and whether the contracting-out process should be simplified;
2. How the terms of a renewal tenancy are determined by the court, and whether changes should be made to address environmental matters;
3. Whether reforms are needed to enable the court to grant a renewal tenancy with a turnover rent and to improve the interim rent process.
4. Reforms to grounds of opposition, including whether changes should be made to account for modern building methods and/or the Minimum Energy Efficiency Standards (“MEES”) regime; and,
5. Reform of the dispute resolution process, including whether lease renewal disputes should remain in the county courts and the potential for greater use of Alternative Dispute Resolution.

As many of the proposals aim to modernise a statutory regime that has remained largely unchanged for decades, important implications arise for both landlords and tenants. The proposed exclusion of most periodic tenancies from the protection of the 1954 Act could reduce security of tenure for some tenants, while simplifying the contracting-out process may be welcomed by parties seeking greater flexibility and certainty. Equally, proposed reforms relating to turnover rents, environmental considerations and redevelopment grounds reflect the changing nature of commercial property occupation and investment.

Stakeholders are encouraged to share their views on the proposed reforms by 16 September 2026. This can be done by completing feedback online (https://consult.justice.gov.uk/law-commission/business-tenancies-consultation-2) or by attending in-person consultations hosted by the Commission.

If you are a commercial landlord or tenant in England and Wales dealing with lease renewals and terminations, or you have any concerns or questions about the impact changes to the legislation may have on you or your business, please do not hesitate to get in touch with our Real Estate Disputes teams or your usual Brodies' contact.