The Law Commission is reviewing the Landlord and Tenant Act 1954 (the “1954 Act”) to assess whether the current security of tenure regime remains fit for purpose in a modern property market.
The consultation seeks views on a range of technical issues, including contracting out, lease renewals, compensation, grounds of opposition and dispute resolution. The overall aim is to simplify procedures, improve certainty and reduce unnecessary costs whilst maintaining an appropriate balance between landlord and tenant interests.
In order to respond to the consultation, our Property Litigation team created a focus group to provide their feedback and practical anecdotes as to how they would welcome reform to the 1954 Act and have submitted their thoughts directly to the Law Commission and through the Property Litigation Association.
A Case for Targeted Reform Rather Than Fundamental Change
Their overarching view is that the 1954 Act continues to provide an effective framework for balancing the interests of landlords and tenants. Whilst certain aspects of the legislation would benefit from modernisation, they do not consider wholesale reform necessary. Instead, changes should focus on simplifying procedures, removing technical pitfalls and addressing practical issues which have emerged through modern leasing practices.
In particular, they support greater flexibility in relation to short-term and periodic tenancies, including wider availability of contracting out and a simplified approach to the qualifying criteria for statutory protection. They also favour streamlining the contracting-out process itself by incorporating the required warnings and declarations within the lease documentation rather than relying on separate notices and declarations.
Preserving Security of Tenure Whilst Reflecting Modern Practice
They consider that the principle of security of tenure remains an important feature of the property market and should be preserved. They do not support reforms which would significantly weaken tenant protections, including broadening landlords’ ability to recover possession for redevelopment purposes where existing grounds already operate effectively. Similarly, they consider that tenants should not lose statutory protection through technical mechanisms such as the operation of section 28 (which provides that 1954 Act protection no longer applies to existing leases where renewal terms have been agreed) before a renewal lease has been completed.
At the same time, they consider that the regime should adapt to modern commercial realities. Environmental and sustainability considerations are increasingly relevant to lease negotiations and should be capable of being taken into account when determining renewal terms; as a BCorp organisation, Stephens Scown strongly encourage environmental matters being considered by the Court using a wide approach given the importance of supporting sustainability practices. They consider that greater clarity is also needed regarding the interaction between the 1954 Act and other statutory regimes, including the Minimum Energy Efficiency Standards framework.
Improving Certainty, Efficiency and Dispute Resolution
Many of the reforms they support are aimed at improving the practical operation of the 1954 Act. Registration delays, procedural requirements and technical disputes can create unnecessary cost and uncertainty for parties. They therefore favour reforms that provide greater certainty regarding the identity of parties, simplify notice procedures and improve the efficiency of lease renewal claims.
They also support moving lease renewal disputes to the Property Tribunal, supported by bespoke pre-action protocols, standard case management directions and mechanisms that encourage early settlement. These changes have the potential to create a more specialist, cost-effective and efficient forum for resolving disputes whilst reducing unnecessary litigation.
Ensuring Fair Outcomes for Landlords and Tenants
They consider that the current compensation regime should be reviewed to ensure that it more accurately reflects the financial consequences of non-renewal. They support moving away from a rateable value-based calculation towards a rent-based approach, together with increased compensation levels and a more proportionate system that better reflects varying periods of occupation.
Overall, their response supports practical and measured reform that maintains the core protections of the 1954 Act whilst simplifying its operation, improving certainty and ensuring the legislation remains suitable for the modern property market.
If you require advice about the impact of the 1954 Act on your property, please get in touch with our Property Litigation Team.
This article was co-written by Kia Pearson, Solicitor Apprentice, Richard Bagwell, Partner, Mike Davies, Partner, Nicola Hall, Associate, Mark Richardson, Partner, Victoria Wells, Associate, Ian Thomas, Partner in our Property Litigation Team.