§ Ms Rosie WintertonTo ask the Secretary of State for the Environment, Transport and the Regions what proposals he has to reform legislation on business tenancies. [139901]
§ Mr. RaynsfordWe propose shortly to consult on use of the order-making procedure in the draft Regulatory Reform Bill to implement a number of detailed improvements to the workings of business tenancies legislation.
Part II of the Landlord and Tenant Act 1954 gives business tenants, in most circumstances, a statutory right to renew their leases. We do not propose to change this, but we wish to improve the workings of the Act to ensure that it operates more efficiently in the interests of both landlords and tenants. Many of our proposals stem from the Law Commission's 1992 review of the workings of the Act.
Among the proposals are changes in the arrangements under which parties may mutually agree to exclude security of tenure before the lease comes into effect. The Law Commission considered that the present procedure of applying to the court serves little purpose, and we are instead proposing that in most cases tenants should receive advance notice with a "health warning" drawing attention to the implications of excluding security of tenure. The tenant would have time to take professional advice and consider alternative arrangements.
Our proposals would also streamline the renewal process, making it simpler and quicker for tenants to renew their leases. They would remove traps for tenants, generally making the system fairer between the parties. Tenants as well as landlords would be able to apply for 128W interim rent, pending settlement on the rent for the new tenancy; while the method for determining interim rent would be fairer.
We are also about to issue a consultation paper on section 57 of the Landlord and Tenant Act 1954. This enables certain landlords of business premises who are in the public sector or who are public sector providers to apply to central Government for certificates which they can then use to circumvent or curtail the renewal of a business tenancy. The consultation paper seeks views on a change of policy by my Department in considering applications for certificates, and on options for repeal bearing in mind the facility for parties to agree to exclude security of tenure from business leases.
Both the Deregulation Committee here and the Delegated Powers and Deregulation Committee in the Lords have approved the principle of advance consultation on prospective use of the powers in the Regulatory Reform Bill.