UK: Reform of the Landlord and Tenant Act 1954

Last Updated: 8 August 2002

Last year Taylor Joynson Garrett participated in the Government's consultation exercise on proposals to streamline Part II of the Landlord and Tenant Act 1954. This piece of legislation, which governs security of tenure for tenants of business premises in England and Wales, is particularly well drafted and has stood the test of time for almost 50 years with very little amendment.

In February this year, the Government issued its response to the consultation, which gives details of the comments received, the conclusions and proposals for change. It appears from the response that the main recommendations in the consultation paper are to be adopted and the revised proposals broadly follow the original ones.

The salient features of the proposed reforms are:

  1. Exclusion of Security of Tenure - The present requirement, to obtain a court order to allow the exclusion of the security provisions of the Act from new leases, is to be replaced by notice provisions. It is intended that tenants should be given at least 14 days’ advance notice containing a "health warning" drawing the prospective tenant's attention to the implications of contracting out of the security provisions of the Act. The Government has acknowledged concerns regarding their original requirement for statutory declarations by the tenant, on each occasion, acknowledging that the tenant had received the notice, read the" health warning" and accepted its consequences. Such statutory declarations will now only be required if less than 14 days’ notice is given.
  2. Surrenders - The procedures for surrender agreements will be broadly similar to those for contracting out leases mentioned above.
  3. Ownership and Control of a Business - The Government has attempted to remove anomalies as to which business entities qualify for rights as tenant or have obligations as landlord under the Act. There is to be an extension of the definitions of " landlord" and "tenant", which will allow related companies to qualify under the Act. The proposals will, however, only apply to the existing parties and not to entirely new business entities, as a safeguard to landlords concerned about the quality and covenant strength of new companies.
  4. Notices Requiring Information - The information-gathering provisions contained in section 40 of the Act are to be strengthened and there is to be a new right to damages for failure to comply. However, calls for standard fixed penalties have been rejected. The landlord should now be informed if a group company is in occupation or there is a contracted out underlease. Landlords are to be able to serve Section 40 Notices on both the premises and the tenant's address, which should assist in situations where the tenancy has changed hands. Section 40 Notices may also be used in relation to termination arising from landlords’ break clauses. A break clause is a "notice to quit" for the purposes of the Act and the new provisions will take this into account. In addition, there will be clarification of the court's existing power to order a recalcitrant party to provide the required information, which had previously not been clear on the face of the legislation.
  5. Renewal - Landlords who do not intend to oppose renewal of a lease will be required to include proposals (including rent) for the new lease in the Section 25 Notice. This could be problematic, as it will mean that the landlord must attempt to predict the development of the market well in advance of the end of the existing term. However, there will be a declaration to state that this is an "opening bid" and that the landlord's proposals are not final and binding. The requirement for a tenant to serve a counter notice will be abolished.
  6. Termination - The Government is proceeding with its proposal that landlords will be able to apply for termination of a tenancy without the court having to consider renewal of the lease. However, if the landlord is unsuccessful, the court is empowered to order a new tenancy and settle its terms and the landlord would not be able to withdraw proceedings without the tenant's agreement. Tenants will be able to end fixed term tenancies without notice by vacating on or before a final day. This gives statutory effect to the decision in the case of Esselte AB v Pearl Assurance Ltd. A three months’ notice to terminate served under Section 27(2) to bring to an end a tenancy which had continued beyond the end of the contractual term, may expire on any day rather than a quarter day as at present.
  7. Time limits - Time limits governing a tenant's notice and application to the court will be retained for the time being, but kept under review. The general view is that they should only be retained if essential to the renewal process. The Government accepts that there is no procedural necessity for time limits, but primary legislation, which would require a separate consultation exercise, would be needed to abolish them. However, the current stringent time limits are to be amended enabling parties to apply to the court at any time before the date specified in the landlord's notice to terminate under section 25 or the tenant's request for a new tenancy under section 26. In addition, parties will be able to extend time limits by agreement.
  8. Interim Rent - Tenants as well as landlords will now be able to apply for an interim rent. This will normally be that set for the new tenancy but the court will have discretion to order an adjustment where appropriate. It will be open to the parties to seek expert determination of interim rent rather than pursuing a court application.
  9. Length of New Lease - The maximum term of the renewed lease will be increased from 14 to 15 years. This is a better fit with the usual rent review patterns of 3 or 5 years.
  10. Compensation - The Government is to proceed with proposals to review the compensation rules where a tenant is precluded from renewing the tenancy. Compensation is currently based on Uniform Business Rates, which is not regarded as appropriate for the specific financial circumstances consequent on being unable to remain in the premises, which the Act aims to address. The Government also plans to review the rule that entitles the tenant to double compensation provided the tenant has operated from the premises for over 14 years.

The changes are to be implemented by a Regulatory Reform Order. A draft Order is being prepared and there will be two rounds of scrutiny by committees in the House of Commons and the House of Lords. The Government has also informally indicated that there will be a programme of publicity and education before the changes come into effect which is expected to be sometime around Easter 2003.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.