For over sixty years the Landlord and Tenant Act 1954 has provided certain business tenants with security by giving them the right to a new lease once the original lease comes to an end.
The 1954 Act is still going strong, and whilst it has provided business tenants with certainty it has made landlords wary of permitting residential tenants to run any sort of business from their homes. However, this may be about to change.
New provisions were added to the 1954 Act on 1 October 2015 to encourage landlords to allow tenants to use their homes for business purposes.
From 1 October, where there is an existing residential tenancy that prohibits its use for business purposes, the landlord will be able to consent to the tenant using it solely for a “home business” without the tenant being able to claim that it has acquired a secure business lease.
Similarly, where any new tenancy of a dwelling house is granted after 1 October to tenants where at least one of them occupies it as home, they will not have a right to claim they are secure business tenants if the tenancy permits them to run a "home business". The only slight niggle is that it is unclear whether it would apply to a flat in a block as well as a house or part of a house.
Home business is defined as “a business of a kind which might reasonably be carried on at home”. The definition is very broad and regulations may be passed to clarify the types of business it will cover.
Whilst not perfect, the changes that have been made should be beneficial to landlords and tenants alike.