The Landlord and Tenant Act should be reformed from an “opt out” to an “opt in” approach, according to the British Property Federation (BPF).
The Law Commission is currently reviewing tenancy security aspects of the Act, proposing four models.
These include abolishing the act entirely, introducing a “contracting in” regime where security of tenure applies only if parties opt in, introducing a “contracting out” regime where security of tenure applies only if parties opt out, or adding a mandatory security of tenure.
In making its argument, the BPF claims that security of tenure should not be the default position for commercial leases and that leases of five years or less should be excluded.
Here, the BPF “strongly” opposes a mandatory security of tenure as mooted in the consultation paper.
The current “opt out” framework also currently causes a considerable day-to-day legislative burden, according to the BPF.
An “opt in” approach would streamline the leasing process, support the decarbonisation of buildings and make it easier to redevelop space according to the trade group.
BPF director Ion Fletcher argued that the Act is over 70 years old, and was last reviewed in the same year that dial-up internet became available in the UK.
“We need reform to streamline commercial leasing, reduce burdens on the courts and support economic growth by de-risking redevelopment and sustainable retrofit,” said Ion.
“Automatic security of tenure was a product of a long-lease environment, but leases are shorter and more flexible than they were 20 years ago. It is time for the law to catch up with the market.”
