The next chapter for the 1954 Act: Key takeaways from the second consultation

Following the initial consultation which concluded that the main process of ‘contracting in’ should remain, the Law Commission has now published its second consultation paper.

The consultation runs until 16 September 2026 and the Commission is keen to hear from as many stakeholders as possible on how Part 2 of the Landlord and Tenant Act 1954 is working in practice and how it might be improved.

The paper sets out a number of provisional proposals and poses 67 questions aimed at modernising the 1954 Act. Contracting out is here to stay, but below is a summary of some of the key issues under consideration:

• Qualifying criteria: the types of tenancy that can have security of tenure. At the moment, short fixed-term tenancies (6 months or less) are generally excluded and the Commission is considering whether the duration threshold should be increased to more than one year or even two years.
• Contracting out of security of tenure. This looks at how landlords and tenants agree to exclude security of tenure. The current procedure can be quite technical, so the focus here is on simplifying and streamlining it to reduce uncertainty.
• Agreements to surrender and agreements for future renewal tenancies. This section considers how parties agree to end a tenancy early or arrange a future one. It questions whether the current ‘validation process’ is still needed or whether it could be removed or simplified, and also asks whether Section 28 of the Act remains fit for purpose.
• The ‘other terms’ of the renewal tenancy. The Commission is reviewing whether the existing approach (based on O’May v City of London Real Property Co Ltd) still works in practice, or whether it restricts the inclusion of terms that better reflect modern market conditions and business needs.
• The rent under the renewal tenancy and during the continuation tenancy. This looks at how rent is set on renewal and during continuation. It includes questions around rent free fit out periods for tenants, as well as how to deal with turnover rents and improving the interim rent process.
• The grounds to oppose a lease renewal. There are no proposed changes to Grounds A-E, but the Commission is seeking views on whether they work effectively. Ground F (redevelopment) may be expanded to better reflect modern construction methods and the MEES regime, and aspects of Ground G (landlord occupation) are also under review.
• Compensation for tenants when a protected tenancy ends. The consultation considers whether compensation should continue to be based on rateable value or move to a rent based approach, and whether the current rules should be updated or made more flexible.
• Dispute resolution. This section looks at how disputes are resolved, particularly whether the county courts remain the right forum given concerns about cost, delays and specialist expertise.
• Identity of the parties. The Commission highlights issues caused by the Land Registry ‘registration gap,’ which can make it difficult to identify the correct party for notice purposes, leading to delays and uncertainty.
• Procedure for claiming or opposing a renewal tenancy. This covers a range of procedural points, including whether landlords can serve notices on tenants who have already left, whether some tenants should be excluded from seeking renewal, whether a maximum notice period should be introduced, and what happens if procedural requirements are not followed.
• Other issues. Finally, the consultation touches on a number of wider points, including whether businesses that grant occupation to others should still qualify for protection, the challenges of complex redevelopment projects, and how MEES interacts with security of tenure.

These are still only consultations, and the feedback provided in the response will shape the Law Commission’s recommendations. We will continue to share our thoughts as the consultation progresses. In the meantime, if you would like to discuss security of tenure or how these potential reforms might affect you, please get in touch with our lease advisory team.