Latest news on the 1954 Act consultation

Following the first consultation the Law Commission have issued an interim statement on the direction of reform and provided their provisional conclusions. 

These conclusions will set the basis of the second consultation paper to assist in ensuring that the 1954 Act works for the commercial leasehold market today.

1. The Commission received over 160 consultation responses which held a majority opinion that the current contracting out model should remain.  

2. The 1954 Act currently excludes certain types of tenancies, such as agricultural tenancies, and the consultation asked if this was suitable. General views from the consultation favoured retaining the exclusions. 

3. The consultation questioned whether it is appropriate to retain the 1954 Act’s current exclusion of tenancies with a duration of up to 6 months. The Commission provisionally concluded that the 6 month threshold should be increased, the second consultation paper is expected to consider increasing the threshold to 2 years.

Overall, we consider the existing contracting out model to be the right model and are pleased that it will remain. However, we believe there is scope to improve and simplify the somewhat complex procedure. In our view, extending the duration of excluded tenancies would be a positive change and a true reflection of the short-term flexible lease arrangements we see more commonly in today’s market.

The second paper will focus on the technical detail of how the 1954 Act might be reformed, including potential changes to the contracting out procedure. We will continue to provide our insights and comments as further information is provided.

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