Introduction
On 22 July 2002 the Government laid before Parliament
the proposal for the Regulatory Reform (Business Tenancies) (England
and Wales) Order 2002 in the form of a draft of the order and
an explanatory memorandum from the Office of the Deputy Prime
Minister (the Department).[1]
The proposed regulatory reform order would amend Part II of the
Landlord and Tenant Act 1954 to make the renewal or termination
of business tenancies, in the Department's words, "quicker,
easier, fairer and cheaper."[2]
Specifically, the proposed order would:
- replace the need for court approval for agreements
to "contract out" of the provisions of the Act providing
security of tenure with new procedures designed to ensure that
the tenant becomes aware of the consequences of such a course
of action (see Part I, section A, of the Report below)
- revise the statutory renewal procedures to facilitate
the process of renewing a tenancy to which the Act applies (section
B)
- rationalise, and bring into line with other relevant
legislation, those provisions of the Act which are concerned with
the definition of the business entities which enjoy rights under
the Act or are subject to its provisions (section C)
- revise the provisions of the Act governing the
service of notices requiring information necessary for parties
to be able to exercise their rights under the Act, so as to make
them more effective (section D)
- change the rules on interim rent, with the aim
of making the system fairer (section E)
- extend the provisions of the Act governing the
circumstances where the tenant can claim compensation for the
loss of his tenancy following misrepresentation by the landlord,
and rationalise the rules for compensation payable in certain
cases where the landlord successfully opposes renewal of the tenancy
(section F)
- confirm on the face of the Act the court's interpretation
of the existing law that the tenant can end the tenancy by quitting
the property before the contractual term date, and provide that
a notice to terminate a fixed term tenancy which is continuing
beyond its term date by virtue of the Act's provisions will be
able to take effect on any day, rather than at the end of a period
ending on a quarter day (section G)
- make certain other changes relating to the working
of the Act (section H).
The House has instructed us to examine the proposal
against the criteria specified in Standing Order No. 141(6) and
then, in the light of that examination, to report whether the
Government should proceed, whether amendments should be made,
or whether the order should not be made.[3]
Our discussion of matters arising from our examination
is set out below. Where a criterion specified in Standing Order
No. 141(6) is not discussed in this report, this indicates that
we have no concerns to raise about that criterion. In the course
of our examination, we requested further information from the
Department about a number of matters connected with this very
substantial proposal. We were satisfied with the Department's
reply on all but one point, namely, the maintenance of necessary
protection for tenants in respect of one aspect of the new procedure
for excluding security of tenure. This matter is discussed at
paragraphs 38 to 50 below. Other matters arising from the Department's
reply are discussed elsewhere in the Report.
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