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Reform of the Landlord and Tenant Act 1954

Reform of the security of tenure provisions of the Landlord and Tenant Act 1954 has long been under consideration. Whilst some have sought to argue that the Act should be repealed, the Government has now stated that it has no plans to change the basic framework. Instead, the Draft Regulatory Reform (Business Tenancies) (England and Wales) Order 2003 seeks to make the Act more straightforward to operate. These reforms will have implications for many of the procedures prescribed by the Act. Here we identify only some of the significant proposals.

The main change proposed is to abolish the need for a court order to exclude the security of tenure provisions of the Act. Instead, what is proposed is that the landlord issues a ‘health warning’ to the tenant at least 14 days prior to completion of the lease setting out the effect of giving up its rights to security of tenure.

There is a further requirement if there is less than 14 days between the serving of the notice and the completion of the lease. Here, the tenant must swear a statutory declaration confirming that it has received the notice and understands the rights it is giving up by contracting out of the Act.

Similar changes are also proposed in relation to agreements to surrender. As is currently the case, these will be void unless a specified procedure is followed. The new procedure will be similar to that outlined above and again, no court order will be required.

The other significant proposals come in relation to lease renewal procedures. Of particular importance to tenants is the abolition of the need for a counter notice to a landlord’s section 25 notice. The tenant will also be able to apply to the court for a new lease without delay.

A tenant’s position is also protected by tenancy termination proposals. A tenant wishing to end the tenancy at the end of the term will be able to do so by either serving at least 3 months’ notice before the end of the term (as at present) or, by ceasing to occupy the premises by the end of the term.

The Order is unlikely to come into force until the end of 2003. However, it is worth all landlords and tenants bearing the proposals in mind, as they will have a significant impact on the procedures to be adopted in dealing with many 1954 Act matters.