The government is moving forward with plans to review lease laws that could see landlords forced to allow tenants to sublet at market rents.
The move comes after a promise from the BPF in March 2004 to create more flexible leases in a bid to avoid legislation, and the signing of a declaration by its landlord members in April this year allowing tenants the right to sublet at market rates.
However, the government is concerned that small businesses may be at a disadvantage when dealing with landlords especially those outside the BPF forum and is on the verge of commissioning research into the level of compliance with all aspects of the lease code.
The Office of the Deputy Prime Minister will shortly set up an “expert group” to examine whether new laws are necessary or desirable and has already begun discussing the possibility of new regulations with the Department for Constitutional Affairs.
It expects to produce a consultation paper early next year.
Martin Meech, head of property at electrical retailer Dixons Group, said: “Legislation in these two areas would certainly be of benefit to tenants and would help them mitigate their losses.”
Francis Salway, chief executive of Land Securities, said: “I suspect the government was quite surprised by the industry’s initiative on subletting.
“But any legislation would have no impact on the signatories to the BPF declaration, who have already agreed to allow subletting at market rent.”
Other signatories to the BPF’s declaration include Hammerson, Morley, Prudential Property Investment Managers and British Land.
