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1954 Act Survey

The Law Commission has now issued the second part of its consultation on reform of the Landlord and Tenant Act 1954 Business tenancies: the right to renew – Law Commission. The consultation paper is detailed, running to some 500 pages and seeks views on a range of detailed points around the operation of the Act including contracting out, determination of lease terms, grounds of opposition and dispute resolution. The PLA Law Reform Committee will be responding to the consultation on behalf of the PLA. To enable us to ensure that our response is as representative of members’ views as possible we would encourage you to complete this survey, the results of which will feed directly into the consultation response. All responses/comments will be anonymised.

The deadline for completion of the survey is 1 September 2026.
Qualifying Criteria
1.Do you think new periodic tenancies (express or implied) should automatically be excluded from the 1954 Act?
2.If periodic tenancies were to remain within the scope of the 1954 Act, should it be possible to contract them out?
3.At the moment, a tenancy of up to 6 months is automatically excluded from the 1954 Act but protection is acquired if there is a chain of tenancies exceeding 12 months. The Law Commission propose that this be simplified so that either a single term of up to 1 or 2 years or a succession of tenancies not exceeding 1 or 2 years should be automatically excluded but not occupation beyond this. Do you agree?
4.Should the duration for automatic exclusion be 1 year or 2 years?
Contracting out
5.Do you favour a new contracting out process whereby the health warning and declaration are within the lease itself?
6.Should the process for contracting out apply in the same way to an agreement for surrender?
7.Should an unauthorised sub-lease be able to benefit from 1954 Act protection?
8.Should a landlord and tenant be able to enter into a contracted out agreement for surrender before the lease is entered into?
9.Should the contracting out requirements be extended to apply to immediate surrenders as well as agreements to surrender?
10.Should section 28 (which provides that 1954 Act protection no longer applies to existing lease where renewal terms have been agreed) be retained?
The “Other Terms” of the Renewal Tenancy
11.Should the test used by courts to decide the “other terms” of a renewal tenancy (other than duration and rent), set out in section 35 of the 1954 Act and interpreted in the case of O’May, be retained?
12.Where the terms in dispute relate to environmental matters, the Law Commission proposes making environmental matters a "relevant circumstance" for the court to consider when applying the existing law. Do you agree generally that environmental matters should be a "relevant circumstance" for the court to consider when determining the renewal terms of a lease?
13.If you agree that environmental matters should be a "relevant circumstance", do you think that "environmental matters" should:
The rent under the Renewal Tenancy
Part A - How should rent be assessed?
Rent-Free Fit-Out Periods
14.Should the renewal rent reflect a rent-free fit-out period that would be granted to a hypothetical new incoming tenant? (In other words, should the sitting tenant benefit from a lower renewal rent on the basis that a new tenant would have received a rent-free fit-out period, even though the sitting tenant has no need to fit out the premises?)
15.If the law is reformed to exclude the rent-free fit-out period from the renewal rent, how should this be achieved?
Turnover Rents
16.Where the original tenancy was at a turnover rent, should the court have a clear power to carry forward that turnover rent model into the renewal tenancy?
17.Should the court also have the power to change the rental model on renewal – for example, from a fixed rack rent to a turnover rent, or vice versa?
18.If the court is empowered to order a turnover rent in a renewal tenancy, the rental model should:
Part B – The date of the Renewal Tenancy and Interim Rent
Date of the Renewal Tenancy
19.Which of the following approaches to the commencement of the renewal tenancy (and valuation date) do you prefer?
20.If Option A (fixed valuation date) is preferred: should the fixed valuation date be:
Interim Rent
21.If Option A (fixed valuation date) is preferred: where the demise and/or other terms of the renewal tenancy differ significantly from those of the continuation tenancy (so that the renewal rent does not properly reflect what the tenant paid during the continuation period), should the rent payable during the continuation period be adjusted accordingly?
22.If Option A is preferred (fixed valuation date): where no renewal tenancy is ultimately entered into, the Law Commission provisionally proposes that interim rent (to cover the period after the fixed valuation date until the tenant vacates) should be assessed as the open market rent for a hypothetical tenancy with the same provisions as the continuation tenancy. In this case, the assumed duration for the hypothetical tenancy should be:
23.If Option B is preferred (valuation date = commencement of the renewal tenancy, determined after litigation), do you agree that under a simplified interim rent regime, the interim rent should be assessed as the open market rent for a hypothetical tenancy with the same provisions as the continuation tenancy?
Identity of the Parties
24.Which of the following options do you prefer to deal with the impact that the registration gap can have on lease renewals:
Procedure for Claiming or Opposing a Renewal Tenancy
25.Do you think landlords should be permitted to serve section 25 notices under the 1954 Act on tenants who are not in occupation?
26.Do you think the ability to serve a section 26 notice should be extended to short term and periodic tenants?
27.Do you think a cap on the notice period under section 27(2) of the 1954 Act should be introduced?
28.If Yes, should the cap be:
Other Issues
29.Do you think the requirement for the tenant to be “in occupation” for business purposes results in difficulties in practice?
30.Do you think the 1954 Act makes adequate provision for the landlord to obtain vacant possession where it plans to undertake complex redevelopment projects?
31.Do you consider other reform to the 1954 Act should be made?
32.Do you think the co-existence of the MEES regime and 1954 Act creates issues in practice?
The grounds to oppose a renewal tenancy
33.The Law Commission at the moment has decided not to amend grounds of opposition A to E but invites views about experience of Grounds A to E, and in particular whether there are problems with their operation in practice that it should address in its final recommendations for reform. Comments:
34.Is Ground F too narrowly worded and its scope inadequate? There are concerns that modern construction methods, such as refurbishment and retrofitting, are potentially excluded from Ground F and that it cannot be relied on to carry out energy efficiency works to comply with the MEES regulations. Comments are invited:
35.The Commission looks at three options for reform of ground F.
  1. Option 1: Expanding the categories of works under Ground F to include modern construction methods and including a purpose or motive filter – for example, providing that those works can be relied on by the landlord only where they are being undertaken for an environmental purpose, or to comply with planning regulations.
  2. Option 2: Expanding the categories of works under Ground F to include modern construction methods, but without including any purpose or motive filter.
  3. Option 3: Replacing all categories of works under Ground F with a single “substantial works” test.
Which option would you favour:
36.The Commission considers three options to address the situation where a landlord successfully relies on Ground G and then uses the premises to undertake the same business as the tenant, benefitting from the tenant’s goodwill.

The options are:

  1. Option 1: explicitly prevent a landlord relying on Ground G with a view to carrying on the same business as the tenant.
  2. Option 2: extend the five-year rule.
  3. Option 3: revise the basis for compensation which operates where a landlord relies on Ground G to carry on the same business as the tenant.
Do you consider that some or all of these changes are appropriate?
Compensation for tenants when a protected tenancy ends
37.Should the basis for calculating compensation for non-renewal change from being based on a multiple of “rateable value” to being based on a multiple of the current rent.
38.Do you foresee particular challenges and/or unfairness in using the current rent in respect of particular rental models (for example, those based on turnover)?
39.Higher rate compensation is linked to the period of occupation by a tenant or their predecessor in title, with the tenant receiving increased compensation if the tenant has been in occupation for a long time. There is currently a single threshold for that increased compensation, which is currently set at 14 years.

Should the calculation of compensation for non-renewal should be based on a system of stepped multipliers e.g. yearly or five yearly intervals and more incremental increases?
40.Should the multipliers for standard rate compensation (namely, 1 x rateable value) and for higher rate compensation (namely, 2 x rateable value) be increased or reduced and, if so, why?
41.If a single threshold point for higher rate compensation is retained, is 14 years still the suitable threshold?
Part C - Dispute Resolution, Procedure and Other Issues
42.The forum in which almost all lease renewal disputes are currently decided is the county court. Views are invited as to which of the following options are preferred.
43.If Option 2 or 3 were implemented, what powers to award costs should the Tribunal be given?
44.If Option 3 were implemented, it could be combined with Option 1, so that: (1) all unopposed lease renewals would be decided by the Tribunal; (2) most opposed renewals would be decided by the county court; but (3) the highest value and/or the most complex opposed renewals would be decided by the High Court.

If Option 3 were implemented, should it be combined with Option 1.
45.Should a bespoke pre-action protocol be created for lease renewals?
46.If so, should separate protocols be created for opposed and unopposed renewals?
47.Should standard case management directions be created for
Yes
No
unopposed renewals
opposed renewals
or both
48.3.2 What particular matters should be included in such standard directions?
49.Should the approach in CPR Part 36 be adapted to create a similar regime for lease renewals?
50.Should it apply only to unopposed renewals?
51.Should it apply only to specific categories of unopposed renewals, such as rent-only disputes?
52.General comments box as to how such a scheme would work.
53.Should each party to a lease renewal dispute be given the right to refer the dispute to non determinative ADR, such as early neutral evaluation or mediation. Under such a scheme, if one party exercised the right, the other party could not object.
54.If such a right were introduced, should it apply to:
55.When, during the lease renewal process, should the right be capable of being exercised?
56.What, if any, form of non-determinative ADR should such a scheme prescribe?
57.How should such a scheme work?
58.Should the 1954 Act be amended to include provisions which promote and/or incentivise the use of ADR within lease renewal disputes (in a similar way to the approach taken in the Electronic Communications Code)?
59.Are there are any specific problems with the way in which Applicability Disputes (i.e. disputes about whether a tenancy benefits from protection under the 1954 Act) are resolved currently?