Select Committee on Regulatory Reform Second Report

Proposal H: Other matters


Present law and problem

If the parties cannot agree on the terms of the new tenancy, they must be determined by the court. The maximum length of the term of the new tenancy which the court, in its discretion, may order is 14 years.[105] The 14-year maximum term is inconvenient since the most common rent review pattern now found in commercial leases is for a review every 3 or 5 years, and the 14-year term did not conveniently divide into 5 or 3 year periods for rent review patterns.


The Department, in accordance with the Law Commission's recommendations, propose a modest reform. The maximum length of the term of a new lease which the court can order should be increased from 14 to 15 years.[106] This would conveniently accommodate modern rent review patterns, since the 15 year term is divisible by both 5 and 3 into periods of complete years.

Reduction of a burden

This aspect of the proposal reduces the restriction on the maximum term of a new lease which a court can grant. The Department also argues that it removes an anomaly, presumably because the existing 14-year maximum does not fit with the common 3 or 5 year rent review patterns.

Necessary protection

This aspect of the proposal would not remove any necessary protection. The Department argues that it is desirable to retain some restriction on the maximum term of lease which a court may grant, since it encourages greater flexibility in leasing; but to the extent that such a restriction may be considered as "protection", that protection would not be affected by this small increase in the maximum term.


Present law

To end a tenancy which falls within the scope of the Act the landlord must, under section 25, serve a notice in the prescribed form.[107] This notice must relate to the whole of the property which was let.[108] This creates a problem in cases where distinct parts of the property comprised in a single lease are owned by different landlords: for example, where a landlord who has let the property subsequently disposes of his interest in part of the property which he has let. The policy behind the general rule is that the landlord should not be able subdivide the reversionary interest in the property let so that parts are excluded from a renewal to which the Act would otherwise have applied.


The general rule mentioned above is not spelt out in the Act, but has been laid down by judicial decision. The Department, in accordance with the Law Commission's recommendation, propose that this should be confirmed and clarified in the Act. Accordingly, where the reversion in the demised property has been subsequently divided between different owners, then, for the purposes of the Act, it will be clear that "landlord" means all the owners of parts of the reversion collectively.[109] This would mean that, in such cases, notices would have to be served by or on, and proceedings taken by and against, all the landlords.


This aspect of the proposal does not change the existing legal position, but rather confirms on the face of the Act the interpretation applied by the courts of the existing legislation. It does not appear either to reduce or impose a burden. The Department suggests that this provision may be regarded as the removal of an inconsistency or anomaly (under s1(1)(d) of the Regulatory Reform Act).[110] Whilst it could be regarded as anomalous that there is at present no specific provision for divided reversions, it might perhaps be more appropriate to describe this as a supplemental provision, under s1(6)(c).

Necessary protection

The protection afforded to the tenant by the existing legislation (as it has been interpreted by the courts) in preventing a landlord from subdividing the premises and "cherry picking" which parts he is prepared to include in a new lease is maintained by this aspect of the proposal. Similarly, the protection afforded to a landlord who may share with another his interest in a property occupied by one tenant is maintained by the proposal, because a tenant wishing to renew a lease on the whole of the premises will have to make requests of all the separate landlords.

105   S 33. With the parties' consent, the court can order a longer term. Back

106   Proposed order, article 26. Back

107   See para 55 above. Back

108   Dodson Bull Carpet Co Ltd v City of London Corporation [1975] 1 WLR 781. By way of exception, however, when the lease includes two distinct properties, and the parties have made it clear that the document is to be construed as a separate lease of each, a notice can relate to one without the other: Moss v Mobil Oil Co Ltd [1988] 1 EGLR 71. Such cases are unlikely to be common. Back

109   Proposed order, article 27(2). Back

110   Explanatory statement, Annex F4, para 7 (page 129). Back

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