With the 1954 Act set for renewal, is this an opportunity for a greener future?
The Law Commission announced on 28 March 2023 that it will be commencing a review of the Landlord and Tenant Act 1954. The 1954 Act gives tenants of protected commercial leases rights to stay in the premises after the original term ends.
The review aims to tackle the “complex and bureaucratic” nature of the 1954 Act which is seen as the key driver in many landlords and tenants instead choosing to contract out of the regime. It is hoped that with greater uptake will come a “beneficial leasing relationship between landlords and tenants” which will in turn reduce the number of void properties on the high street.
The 1954 Act has been thrown into the spotlight in recent years as a result of the Covid-19 Pandemic, but alongside this has been a growing focus on “green lease terms” and whether tenants or landlords can insist on the inclusion of these terms in the lease on renewal. Generally on a renewal the court is only able to depart from the terms of the existing lease where any change is fair and reasonable as between the landlord and tenant. The consequence of this is that it is difficult for parties to incorporate modern green lease clauses such as energy efficiency measures or the requirement to maintain a specific EPC rating where this would depart from the existing, and often quite outdated, wording. This point was specifically considered in last year’s case of Clipper Logistics Plc v Scottish Equitable Plc.
If the Government is serious about meeting its goals of modernising the 1954 Act and bringing it in line with net zero targets, then this is a challenge that will have to be tackled.
The Law Commission aims to publish a consultation paper by December 2023.
Subcribe to news and viewsDecades-old laws affecting business tenants to be reviewed The Law Commission of England and Wales has today announced that it will review the key piece of legislation used by businesses who lease shops, offices and other commercial premises.
https://www.lawcom.gov.uk/decades-old-laws-affecting-business-tenants-to-be-reviewed/