By James Carpenter

Partner – Head of Commercial Litigation

16 October 2026

Article Blog

The Landlord and Tenant Act 1954 (Act) contains the security of tenure provisions that commercial tenants benefit from. These protections mean that a commercial tenancy will continue beyond the contractual expiry date for so long as the tenant remains in occupation. The tenancy can only be terminated in one of the ways prescribed by the Act: the service of a (landlord) Section 25 Notice or a (tenant) Section 26 or 27 notice.

The Act is arguably the most prominent piece of legislation affecting the commercial leasehold landscape and 72 years on from coming into force, landlords and tenants are still bound by the strict framework and processes the Act prescribes. For some time, the feeling that the framework is outdated and no longer fit for purpose in the modern market has been intensifying and there have been calls for reform.

On 16 June 2026, the Law Commission (an independent body that reviews and proposes reforms for existing laws) published their second consultation paper regarding the modernisation of the Act.

In the paper, the matters the Law Commission consider include:

• Expanding ground(f) – currently a landlord can seek to oppose a renewal (and recover possession of a premises) on the ground that they intend to redevelop the property in question (ground f). The Law Commission propose modernising ground f, so that it extends to refurbishment, retrofitting and works undertaken for environmental purposes.
• Fixing the commencement date of the renewal tenancy to an earlier set date – presently, the commencement date of a renewal lease will be 3 months after the court determines the terms of the new lease. This means that the valuation date for the renewal rent (which coincides with the commencement date) will be dictated by the progress of the litigation. As the law currently stands, a party could therefore tactically delay proceedings to achieve a different rent outcome. The Law Commission propose simply fixing the commencement date of the renewal lease to an earlier set date linked to the service of the Section 25/26 Notice.
• Other rental models – the paper discusses whether there ought to be greater clarification as to whether the Court can order that modern rental models such as turnover rent (where a tenant pays rent based on a percentage of their business income or sales revenue) can be carried forward to a renewal tenancy and whether the Court can order that the rental model be varied in a renewal (e.g. from ordinary rack rent to turnover rent).
• Changes to “contracting out” – the Commission consider whether the “cumbersome” process of a landlord serving a warning notice and the tenant swearing a statutory declaration agreeing to the exclusion of the Act ought to be replaced. An alternative process is proposed whereby the prescribed warning notice would appear in the lease itself. At completion, the tenant would then sign a declaration saying they have understood the terms of the notice. The Law Commission consider that this would provide tenants with greater protection as, with the warning notice appearing in the early drafts of the lease, they would have sight of the cautionary wording earlier in the process (as opposed to days before the lease completes).
• Increasing the minimum lease term to benefit from protection – the proposal is that the 6-month minimum term threshold to qualify for protection under the Act should be increased to one or two years.
• Excluding express and implied periodic tenancies from the protections – periodic tenancies have no pre-determined end date and continue from one period to the next (e.g. monthly) until terminated upon notice by landlord or tenant. They can be created by express agreement or, in the absence thereof, implied by the tenant paying rent periodically. They are meant to be flexible and the Law Commission are of the view that imposing the Act’s strict framework on them stifles that flexibility. The proposal is therefore to exclude both types of periodic tenancy from the protections of the Act, save for express periodic tenancies granted to a tenant who already benefits from protection under the Act.

The consultation closed on 16 September 2026 and the Law Commission are currently analysing the responses to conclude as to whether there is wide-spread support for proposed reforms and whether there may be any unintended consequences from what they suggest.

The statutory ban on upwards only rent reviews (soon to come into effect) will already have a big impact upon the commercial leasehold landscape, but after the Law Commission publish their final report, it seems likely that further transformation will be on the way.

If you need assistance with any of the changes highlighted in this article, or any other property litigation law matter, please contact the TW Property Litigation Team.

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