If a commercial property is let, what does ‘inside’ and ‘outside’ the Landlord and Tenant Act mean?

Video Transcript

Commercial properties are generally let to tenants on leases. The rules of the lease are governed by the Landlord and Tenant Act 1954. The Landlord and Tenant Act gives tenants security of tenure, which provides them with rights to renew their lease when it expires. This is important to tenants as it helps protect their place of business, which they might have been in for many years. The tenants will have the right to automatically renew their lease at expiry if their lease has been agreed ‘inside’ the Landlord and Tenant Act. But they will not have this right if the tenant agreed their original lease ‘outside’ of the act. This gives the landlord greater flexibility to re-let or gain possession of the property. It is becoming increasingly common for landlords to grant leases outside of the act, which gives them greater control of the property at the end of the tenant’s lease.