Lawbite: Ground (f) reform: will opposing lease renewals become easier?

Summary

The Law Commission’s second consultation on the Landlord and Tenant Act 1954 (LTA 1954) seeks views on expanding the categories of works that allow a landlord to oppose a business lease renewal under ground (f) of the LTA 1954. 

As part of this consultation the Law Commission asks whether the court should be required to consider the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (MEES) and its underlying policy, or environmental and sustainability concerns, when considering ground (f) claims. A particularly topical issue given the government’s recent announcement on the direction of travel for MEES and Energy Performance Certificates (EPC). 

A widening of the scope of ground (f) could make it easier for landlords to oppose renewals, for example, where they intend to carry out modern refurbishment, retrofitting or energy efficiency works. There are, however, some safeguards in place which the Law Commission do not propose removing and which offer significant protection to tenants.

The consultation will be of interest to landlords and tenants of commercial property in England and Wales. It has particular significance for owners of older or energy-inefficient buildings and for tenants occupying premises that may require substantial upgrading.

The consultation closes on 16 September 2026. Whatever the outcome of the consultation, the law will not change overnight. The Law Commission will first need to publish its final recommendations and the Government will need to decide whether to legislate.

What could change?

Under current law, a landlord can oppose a lease renewal under ground (f) only if it intends to “demolish or reconstruct the premises…or…carry out substantial work of construction” on the holding on the termination of the tenancy. That wording dates from 1954.

Stakeholders have raised concerns that this language may not cover modern construction methods. Refurbishment and retrofitting, including works to improve energy performance, may fall outside the existing statutory categories.

The Law Commission’s second consultation paper asks whether the scope of works in ground (f) should be broadened to reflect modern building practices and energy efficiency obligations.

Why ground (f) matters

Ground (f) is one of seven grounds on which a landlord may oppose a tenant’s application for a new tenancy under Part II of the 1954 Act. This ground aims to strike a fair balance between the protection offered to a tenant under the security of tenure regime and a landlord’s need to secure vacant possession to pursue a genuine redevelopment scheme. It is commonly referred to as the redevelopment ground.

The three reform options

The Law Commission invites views on three possible approaches:

• Option 1: expand the categories of works to include modern construction methods (such as refurbishment and retrofitting) and add a purpose or motive filter. The filter could require that works serve an environmental purpose or comply with planning regulations.
• Option 2: expand the categories of works to include modern construction methods without any purpose or motive filter
• Option 3: replace the existing categories entirely with a single “substantial works” test

Each option has different implications for certainty, breadth and tenant protection. A purpose filter (Option 1) would narrow the scope but introduce new complexity. A broad “substantial works” test (Option 3) would be flexible but potentially less predictable.

What is not changing?

If ground (f) is widened, more landlord development schemes could potentially qualify, which could lead to a shift in the balance between landlords and tenants.

The Law Commission is clear, however, that two fundamental safeguards remain. To succeed with a ground (f) opposition, a landlord must demonstrate not only that the works fall within scope, but must also show:

• a firm and settled unconditional intention to carry out those qualifying works (following S Franses Ltd v The Cavendish Hotel (London) Ltd [2018] UKSC 62, which is not being revisited as part of this consultation); and
• that it could not reasonably carry out those works without obtaining possession of the holding (section 31A preserves the tenant’s position where works can proceed without possession or without substantial interference).

These safeguards continue to protect tenants against opportunistic opposition. A landlord cannot simply assert an intention to redevelop without an unconditional intention, and the tenant retains protection under section 31A where works could proceed without vacant possession.

It is also worth noting that the Law Commission does not propose changing the date on which intention must be proven, being the trial date.

Why MEES matter

The consultation specifically asks whether ground (f) should refer to MEES.

The Government has confirmed its direction of travel on MEES for non-domestic buildings. Its interim response proposes that all privately rented non-domestic buildings over 1,000 square metres in England and Wales should meet Energy Performance Certificate B by 2031, if cost effective.

This creates a potential tension. Landlords may need to carry out significant energy efficiency works during the term or at renewal. If those works do not satisfy the current ground (f) wording, the landlord may be unable to oppose a renewal even where substantial upgrading is required.

There may be exemptions available to landlords in these situations, in particular where the tenant refuses to consent to the relevant energy efficiency improvement being undertaken. However, responses to the first consultation indicated a lack of clarity about how some of the exemptions operate in practice. There could also be a public interest in facilitating works that improve building stock from an environmental and sustainability perspective, given the wider environmental objectives, including the transition to net zero.

The Law Commission has not proposed a standalone MEES-related ground of opposition. It is asking whether MEES compliance should form part of an expanded ground (f) or whether the existing framework is sufficient.

Key points

• the Law Commission is consulting on, amongst other things, expanding ground (f) to cover modern refurbishment and retrofitting methods, which could give landlords greater scope to oppose lease renewals for redevelopment purposes
• the fundamental safeguards of genuine intention and the need for possession remain unchanged, so any expansion of scope does not automatically equate to a removal of tenant protection
• MEES compliance is an increasingly pressing issue for landlords of larger commercial buildings, and the interaction between energy efficiency regulation and security of tenure may need to be addressed
• it is too early to know the final shape of reform, but stakeholders should engage with the consultation process now to influence the outcome
• the Law Commission also seeks views on reform of ground (g), which enables a landlord to oppose a renewal tenancy based on its intention to occupy the premises for its own business purposes or as its residence; and
• for more information on this second consultation, please see our article Lawbite: Reform of business lease renewals – second consultation published.