Business Tenants’ Guide To Lease Renewals

If you’re a business tenant and run your company from leased premises, then the upcoming legal changes could impact how you operate your business.

The Landlord and Tenant Act 1954 is currently under review and could result in a loss of protection for commercial lease tenants across England and Wales – which is why it’s important to be prepared for any possible changes to the law.

What Is The Landlord & Tenant Act 1954?

This 1954 Act has provided protection for business tenants over the past 70 years by enabling them to stay in leased premises after their lease ends.

The Act also grants commercial tenants the right to a new lease on similar terms to the previous one, unless there are valid grounds for the landlord to oppose this.

At the moment, a landlord can only refuse to renew a lease with good reason, outlined by one of the following:

• Fault-based reasons such as rent arrears or property disrepair

OR

• No-fault reasons such as the landlord intending to use the premises themselves or to redevelop the property

Tenure protection is only for leases granted within the Act – if your lease was signed outside the Act, you have no automatic right to renewal.

However, for those leases within the Act, this protection is now under threat due to the planned changes to the Act.

Commercial Leases – What’s Changing?

The 1954 Act is under review following the start of a 2-part examination by the Law Commission in November 2024.

The first part was completed in February 2025. The initial findings, which were then published, included the following:

• The contracting-out model (which results in removal of protection for Tenants by Agreement) that already exists will stay
• There will be changes to the minimum lease duration needed to quality for statutory protection – this could increase from 6 months to 2 years
• The processes for dispute resolution, grounds of opposition, contracting out and compensation will all be reviewed

The second paper was due to be finished in Spring 2026 but is still ongoing. However, we do know that short-term commercial tenants are likely to be at risk of losing their tenure protections when the law does change.

Business Tenants – How Best To Prepare?

Today, nothing has changed for business tenants as the law hasn’t been updated yet. However, as changes may become law soon it’s a good idea to start preparing for any potential implications for your business lease.

Business tenants can take steps to be ready for the changes to the 1954 Act, including:

• Carry Out A Lease Review
  This is particularly important is your existing lease is less than 2 years in duration as you could lose your security of tenure protection following the updates to the Act. Seek specialist advice to check if you need to review your lease before its renewal date.
• Get Ready To Negotiate
  Make sure you’re in a strong position legally to negotiate your lease renewal as not all landlords act in good faith and could use the request as a reason to increase your rent significantly or to refuse to renew.
• Check If Your Lease Is Inside The Act  – Whatever the Length of Your Lease
  If your lease is inside the Act, you currently have the legal protection to stay on and to renew the lease on similar terms. However, if your lease was contracted out of the Act at the time of signing, you have no automatic right to renew it and you should seek legal advice before the lease expires to make sure the correct notices are issued in time and that you’re able to find alternative premises if needed.
• Understand Your Rights
  Lease renewal can trigger rent reviews so make sure you know your rights regarding this and that you’re prepared.

Helping You With Your Lease Renewal

Our experienced commercial property solicitors are here to advise and guide you through the process of lease renewals, as well as the procedures of rent reviews and landlord disputes.

We will make sure you understand your rights, whether your lease is inside or outside the Act, to ensure the process is managed correctly, and the outcome is the best possible one for you and your business.

By being prepared, you put your business in the strongest possible legal position and help ensure any potential implications following the changes to the Act can be minimised.

Contact us for today for specialist advice on your commercial lease renewal, rent review or tenant circumstances, ahead of the law changes

To speak to us about your commercial lease, you can contact us at our Chorlton office on 0161 860 7123 or email chorlton@hlfberry.com or at our Failsworth office on 0161 681 4005 or email failsworth@hlfberry.com and we will be happy to help.