In short: the Law Commission is reviewing Part 2 of the Landlord and Tenant Act 1954, which gives business tenants in England and Wales a right to renew their lease unless it is "contracted out". Its second consultation closed on 16 September 2026. So far, the Commission has concluded that the contracting-out model should stay. It expects to raise the length of tenancy excluded from the Act from six months to two years, and it is consulting on simplifying contracting out. Nothing has changed in law yet. A final report will come first.
Why the 1954 Act matters for farm lettings
Most farm workshops, storage units and offices are let on business leases or licences. Under the 1954 Act, a business tenant who occupies under a lease usually has security of tenure: when the lease ends, they can ask for a new one, and the landlord can only refuse on specific grounds. Many landlords and tenants agree to contract out of these rights. That needs a warning notice from the landlord and a declaration by the tenant before the lease is signed. Leases of six months or less are generally outside the Act.
What the Law Commission has said so far
According to the Law Commission's project page:
- First consultation: published 19 November 2024, closed 19 February 2025.
- Interim statement (June 2025): "There should be no change to the model of security of tenure. The existing contracting-out model should remain." The Commission also expected to consult on raising the threshold for excluding short tenancies from six months to two years.
- Second consultation: published 16 June 2026, closed 16 September 2026.
The second consultation covers:
- which tenancies the Act applies to, including excluding most periodic tenancies and raising the fixed-term threshold;
- simplifying the contracting-out process;
- how courts set the terms of a renewal lease, including environmental terms and turnover rents;
- improving interim rent;
- the redevelopment ground for refusing renewal ("ground F"), including how it interacts with energy efficiency rules;
- whether renewal disputes should stay in the county courts.
A parallel Law Commission project on commercial leasehold consulted on the same timetable. The Commission says it will publish a final report "in due course". Any change to the law would then need legislation.
What it could mean for farmers and tenants
If the short-lease threshold rises to two years, lettings of up to two years would fall outside security of tenure without any contracting-out paperwork. Many small farm lettings run for one to three years, so this could make short arrangements simpler for both sides.
If contracting out is simplified, it could reduce paperwork for longer leases where both parties agree that the tenant shouldn't have an automatic right to renew.
For tenants, the retained contracting-out model means it remains important to understand whether a lease is protected before signing. A contracted-out lease gives no automatic right to stay at the end of the term.
What to do now
Nothing changes yet. The current rules still apply:
- Owners letting for more than six months, who don't want the tenant to have renewal rights, still need to contract out correctly before the lease is signed.
- Tenants should check whether a lease is contracted out, and take advice if they need long-term security.
Our guides on renting out an unused farm building and renting a farm unit as a small business explain leases and licences in more detail.
Frequently asked questions
Is the Landlord and Tenant Act 1954 being abolished?
No. The Law Commission has concluded that the existing contracting-out model should remain. It is consulting on modernising how the Act works.
Will short business leases be excluded from the 1954 Act?
Leases of six months or less already are. The Law Commission expected to consult on raising the threshold to two years. Any change would need a final report and then legislation.
When will the 1954 Act change?
There is no date. The Law Commission will publish a final report, and the government would then need to legislate. Until then, the current rules apply.
This article is general information about the law in England and Wales as at October 2026, not legal advice. Scotland and Northern Ireland have different business tenancy laws.
Photo credits
Photographs are reproduced under Creative Commons licences and have been resized and cropped.
- Timber barn in Stuntney by Richard Humphrey, licensed under CC BY-SA 2.0
