Many property professionals will welcome this announcement. The Landlord and Tenant Act 1954 is a key area of legislation governing the relationship between businesses and property owners. It is a central legislative cog in the way commercial leases are negotiated, renewed, and in certain circumstances terminated by landlords. It creates a complex set of rules which can lead to time-consuming litigation.

Many in the industry see the current framework as out of touch with the real commercial drivers of occupiers and landlords, complicating and adding significant cost to the process of renewing leases.

The review, commissioned by the Department for Levelling Up, Housing and Communities, will look to reform the 1954 Act to make the system “easier to understand and more transparent”. The aim is to improve the law in this area to make leasing commercial premises simpler and less bureaucratic, ultimately reducing barriers and stimulating high streets and commercial centres.

It is hoped the eventual changes will align much more closely with the needs of those operating in the sector, given the very significant challenges in the real estate market over the last few years. The legal framework should help to promote - rather than hold back - innovation and modernisation, particularly in view of the increasingly critical aims and requirements around sustainability and net zero.

This is a positive and long-awaited step towards simpler and more effective processes governing the renewal of commercial leases. 

The Law Commission aims to publish its consultation paper in December 2023.