Law Commission consults on reform of commercial leasehold and business tenancies laws

It said these changes would support businesses operating from shops, restaurants warehouses and other locations by modernising commercial leasehold law. 

The Government's law reform advisory body said it decided to consult because landlords and tenants faced unnecessary obstacles in commercial transactions, which in turn prevented commercial space from being occupied quickly and efficiently, including in high streets where there is concern about empty premises.

It said for decades the law had not kept pace with market changes, creating uncertainty, waste and delays.  

Under existing laws, business tenants are entitled to renewal tenancies, which enable them to remain in premises for longer, but the Law Commission said this regime “is not working as it should” as those choosing to opt out “must follow a convoluted procedure, involving unnecessary expense and delaying when a business can start to trade from premises”.

Legal protections for tenants introduced in the 1980s and 1990s – including flat owners’ right of first refusal where their landlords plan to sell – were also not working as intended, according to the Law Commission and were instead “preventing sensible commercial leasehold transactions and causing needless bureaucracy and risk”. 

The Law Commission said its work would benefit both tenants and landlords, by creating a framework that is fit for purpose and would maintain important protections both for business tenants and residential flat owners. 

Professor Lisa Webley, commissioner for property, family, and trust law, said: “Businesses of all sizes across England and Wales rely on a vibrant and well‑functioning commercial leasehold market.

“The law is, however, causing significant problems in practice, creating barriers for businesses.

“We are consulting on removing unnecessary obstacles in commercial leasehold transactions and setting out detailed proposals to modernise the right of business tenants to a renewal tenancy. 

The consultations run until 16 September 2026. business and tenancies project page, commercial leasehold project page.

Mark Smulian