Landlord and tenant legislation needs to be “quicker, clearer and simpler”, according to a survey by the Property Litigation Association in the wake of the announcement that the Law Commission is to review the Landlord and Tenant Act 1954.
The survey of its 1,600 members, which the PLA said was one of the largest ever studies into the legal framework between commercial landlords and tenants, found that, while the 1954 Act still strikes a “fair balance” between landlords and tenants, there is an “urgent need to streamline the process” to enable economic growth.
However, PLA members – property litigators who represent the interests of both owners and occupiers – overwhelmingly reported that they do not want a wholesale tearing up of the system. Instead, they seek improvements in speed and clarity.
The PLA’s findings will be turned into a full report that will help inform the Law Commission’s impending review of the 1954 Act, with the commission anticipating the publication of a consultation paper in December.
Dellah Gilbert, chair of the PLA and a partner at Maples Teesdale, said: “The system is not broken, but it still needs fixing. What a review must ensure is that it makes the system quicker, clearer and simpler.
“With the economy wobbling, we need the right processes in place to create an efficient environment that allows business to flourish. This study is an essential contribution towards the development of a fairer legal framework that better serves property owners, occupiers, the economy and the environment.”
Paul Tonkin, chair of the PLA’s law reform committee and partner at Hogan Lovells International, added: “What we can see is, while there are still questions over some specific parts of the Act, it is still fit for purpose and provides a fair playing ground between landlords and tenants.”
According to the PLA, a streamlining of the Act’s provisions could include guidance notes to help narrow down issues of conflict, increased digitalisation and less time in courts.
Among the survey’s key findings were:
■ 90% of respondents said security of tenure must stay;
■ 70% said the current tenure regime strikes a fair balance between landlords and tenants;
■ 76% wanted a guidance note or protocol to help agree lease renewals, which would narrow down issues at an early stage;
■ 80% said the contracting out (an agreement by the tenant to forgo security of tenure) process could be simplified and modernised, for example so that it can be achieved by e-mail and with electronic signatures;
■ 70% said tenants should have the right to renew their lease on the basis of turnover rents;
■ 87% said leases should be renewed on the terms of the existing leases; and
■ 85% said more emphasis should be put on market conditions at renewal.
Other areas proved more divisive, notably around new environmental, social and governance considerations. Under current security of tenure rules, the grounds on which a landlord can evict a tenant who wishes to stay at the end of a lease centre around an intention to redevelop the property. However, many necessary ESG upgrades would not be counted as redevelopment works, potentially leading to conflict.
Respondents were split on whether the redevelopment ground should be widened to enable landlords to oppose renewal in order to undertake energy efficiency improvements, with 54% in favour.
There was similar disagreement as to whether courts should be involved in the process at all – with only 47% responding yes, and respondents often citing this as a main cause of delay in negotiations.
See also: Landlord and Tenant Act 1954: what might reform look like?
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