Security of tenure reform: The latest on the Law Commission’s consultation

The Law Commission’s views on potential reform of the security of tenure have been unveiled following the first stage of a national consultation. But what, if anything, is set to change?

Thrings’ Senior Associate Aiden Wiffen takes a look at the outcomes of this latest step in the consultation and the things commercial landlords need to know about what’s changing, what isn’t and what the future might hold.

A time for change – but not revolution

Enshrined in the Landlord and Tenant Act 1954, the protections, that gives tenants the right to stay in occupation after their lease expires, have been a cornerstone of UK commercial property law for more than 70 years. But, whilst still functioning, the law has long been considered in need of update to better reflect the sector’s modern landscape.

Exploring the potential for a balanced refresh, as opposed to wholesale change, the Law Commission’s review of the 1954 Act seeks to simplify processes, update outmoded provisions, and improve clarity without disrupting the commercial property market.

Having concluded in February this year, phase one of this review – the initial three-month consultation – invited on how security of tenure might be modernised, with the recently published summary of conclusions offering a mixed bag of continuity and moderate change.

Key takeaways for landlords

• The core framework is staying put: Despite some speculation, the Commission has provisionally decided to retain the current statutory security of tenure model, along with the familiar “contracting out” process. This should be reassuring news for landlords – especially those who rely on the ability to opt out of renewal rights for shorter-term or more flexible leasing arrangements.
• Exclusions and tenant types will largely stay the same: The list of tenancy types currently excluded from security of tenure protection (for example, agricultural or mining leases) will not be significantly revised, at least for now. Landlords dealing with non-traditional spaces or uses may still want to watch this space, but no sweeping changes are on the horizon.
• Short-term leases may see more flexibility: Perhaps the most tangible proposed change is the threshold for security of tenure eligibility. The Commission is leaning towards raising the bar from six months to two years. This would mean that leases shorter than two years would no longer automatically attract security of tenure protection – a potential win for landlords offering pop-ups, short-term lets, or flexible space.
• Contracting out still required, but maybe easier: While the Commission isn’t scrapping the current contracting-out process, it has flagged this as an area ripe for procedural reform. Currently, the notices and declarations required can feel overly bureaucratic. Simplifying this could reduce risk and cost for landlords without changing the underlying rights structure.

What’s next?

The Law Commission will now move to the second phase of the review: a further consultation that will dig into more technical aspects of the 1954 Act. While the exact scope and timing remain unconfirmed, likely topics include:

• Rent determination mechanisms
• Landlord opposition to renewal
• Termination compensation
• The use of contractual renewals
• Dispute resolution processes
• Tackling registration gaps and timing issues

In other words, the next phase could be where meaningful, user-focused reform emerges – not by changing the basic rights and responsibilities, but by making the rules more workable in practice.

Why this matters

From a landlord’s perspective, the current state of play offers a degree of welcome stability. There’s no immediate overhaul, and familiar mechanisms (like contracting out) remain intact. But landlords should also see this as a chance to be proactive.

The proposed two-year threshold change could reduce the risk associated with short lets – but only if and when it comes into force. Similarly, procedural reforms may eventually reduce red tape, but for now, the old rules still apply.

The consultation process also provides an opportunity for landlords to make their voices heard. If you're routinely dealing with issues under the 1954 Act – whether delays, costs, or uncertainty – now is the time to engage.

Aiden Wiffen, Senior Associate in the Thrings Property Litigation team, said: “These conclusions show the signs of a measured and commercially sensitive approach from the Law Commission, with a focus on improving the system, rather than starting from scratch, being a welcome practical approach.

“This is, of course, still the early stages, and there will be much room for change as the consultation progresses, but while some landlords may be disappointed not to see more radical reform being promoted, others will no doubt welcome the continuity and clarity.

“As the process continues, we would recommend commercial landlords take the time to review lease portfolios for short-term tenancies, in case they can benefit from the proposed two-year rule and continue to seek legal and professional advice to ensure they are staying up-to-date on how the sector could change.”

Thrings’ Property Litigation lawyers are experienced in safeguarding your assets and reaching resolutions in disputes, often without recourse to court proceedings, and with an excellent track record when cases do go to court. To find out how they can help protect your assets, get in touch.