Guidance on Excluding Security of Tenure

This Guidance on Excluding Security of Tenure sets out the procedure a landlord and tenant/guarantor must follow in order to grant a lease with no security of tenure.

In general, tenants of commercial premises have security of tenure, which means they have the right to remain in occupation of the premises at the end of the term of the lease and can apply to court for a new lease to be granted. The landlord can only resist such an application on certain grounds. However, the landlord and tenant can agree that the lease will be granted without security of tenure.

This Guidance looks at the three-step procedure that the landlord and tenant must follow in order to ensure that the tenant does not acquire security of tenure.

Law Commission Review
The Law Commission is to conduct a wide review on Security of Tenure in 2024 with a view to modernising commercial leasehold legislation, with an emphasis on: 

• creating a legal framework that is widely used rather than opted out of, without limiting the rights of parties to reach their own agreements, by making sure legislation is clear, easy to use, and beneficial to landlords and tenants; 
• supporting the efficient use of space in high streets and town centres, now and in future, by making sure current legislation is fit for today’s commercial market, taking into account other legislative frameworks and wider government priorities, such as the “net zero” and “levelling up” agendas; and
• fostering a productive and beneficial commercial leasing relationship between landlords and tenants.

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