Understanding Security of Tenure: What It Means for Commercial Tenants and Landlords
Whether you’re a commercial landlord or a tenant, understanding security of tenure is essential for managing lease agreements effectively. It plays a pivotal role in shaping business continuity, property rights, and long-term leasing strategies.
In this article, we’ll explain what security of tenure means under the Landlord and Tenant Act 1954, how it works in practice, and what legal steps both parties need to take when negotiating lease terms or renewals.
What is Security of Tenure?
Security of tenure is a legal right granted to tenants under the Landlord and Tenant Act 1954, giving them the option to remain in the property after the lease ends and to request a new tenancy under similar terms.
It protects tenants from being evicted or losing their premises when a lease expires—unless the landlord has valid grounds to refuse renewal (which are limited and must be justified).
Key takeaway: If your commercial lease has security of tenure, your landlord cannot simply refuse to renew your tenancy without a lawful reason.
When Does Security of Tenure Apply?
Security of tenure generally applies when:
- The lease is for a business purpose
- The tenant is in occupation of the premises
- The lease has not been “contracted out” of the Act
However, landlords and tenants can mutually agree to “contract out” of the Act before signing a new lease—meaning the tenant waives their right to automatic renewal at the end of the term. This must be done through a prescribed legal notice and declaration process.
Implications for Commercial Tenants
For tenants, security of tenure offers peace of mind and stability. It enables businesses to grow with the confidence that they won’t be arbitrarily removed from their premises.
It also strengthens their negotiating power at the end of the term. Tenants have the right to apply to court for a new lease if the landlord does not voluntarily agree to renew it.
However, tenants must also be aware that landlords can object to renewal on specific statutory grounds, such as intent to redevelop or persistent breach of lease terms.
Implications for Commercial Landlords
For landlords, security of tenure can limit flexibility when planning redevelopment or restructuring their property portfolio. It also means that evicting a tenant simply because a lease has ended is not permitted under protected leases.
If a landlord wants to regain possession at the end of a lease, they must serve a valid Section 25 Notice and cite one or more of the statutory grounds—such as:
- Tenant’s failure to maintain the property
- Landlord’s intention to occupy the property for their own business
- Planned demolition or reconstruction
Failing to follow the correct legal procedures can result in costly delays and legal disputes.
How Solicitors Help with Security of Tenure
Whether you’re a landlord looking to contract out of the Act or a tenant seeking to renew a lease, expert legal advice is essential. At Stretton Solicitors, we help both parties:
- Draft and negotiate leases with or without security of tenure
- Serve or respond to Section 25 or 26 notices correctly
- Understand and comply with the Landlord and Tenant Act 1954
- Represent clients in lease renewal or opposition proceedings
Our property law experts ensure that your rights are protected and that your lease strategy aligns with your business goals.
According to RICS, over 60% of commercial lease disputes involve misunderstanding or misuse of security of tenure rights under the 1954 Act.
Need Help Managing Lease Renewal or Security of Tenure?
Security of tenure can be complex—but it doesn’t have to be confusing. At Stretton Solicitors, we offer practical, business-focused legal advice to both landlords and commercial tenants.
Contact us today for tailored legal support and ensure your lease agreements are fully compliant, clear, and future-proof.
Request a consultation and speak to one of our commercial property solicitors today.