Law Commission To Review The Law Relating To Commercial Leases

The Law Commission is the government agency which considers changes to the law, identifying potential areas for review, consulting on them with experts and the public and publishing reports with their recommendations  which may lead to changes to legislation. 

Their latest programme was launched on 4 September 2025 and one of the projects identified was further issues with commercial leases.

The right to renew had already been identified as a subject for review and the commissioners’ interim statement has already been published –  Business tenancies: Interim statement on direction of reform – Law Commission.  Now they are looking at two projects:

• a focused review of two aspects of the law relating to commercial leasehold transactions:
• issues with the Landlord and Tenant (Covenants) Act 1995; and
• rights of first refusal under the Landlord and Tenant Act 1987 (in so far as the law relates to commercial premises).
• a scoping project, focusing on the law relating to the maintenance, repair and upgrading of leased commercial buildings. The commissioners will consider the law relating to dilapidations, service charges, and the interaction between environmental frameworks and commercial leasehold law.

Amongst other changes, the 1995 Act changed rules relating to the ongoing liabilities of outgoing tenants on lease assignments and restricted landlords’ rights of re-entry and forfeiture.

The 1987 Act affects commercial premises where it is a mixed use building and there are residential tenants in the building who benefit from the right of first refusal on the disposal by the landlord of the landlord’s interest in the building.

Currently no further information I available as to details of the projects or next steps and timing.

Commercial leasehold – Law Commission