Property Law Update: premises used for “home business” purposes

Dispute Resolution - 1 minute read

This article from our property disputes solicitors looks at implications for residential landlords on the estimated ‘one in four people’ who now carry out some of their work from home.

It is noteworthy that the Landlord and Tenant Act 1954 has recently been changed to deal with premises used for “home business” purposes.

The changes are part of the Small Business, Enterprise and Employment Act 2015 – which received Royal Assent on 26 March 2015 (to come in to force on a date to be confirmed).

The aim of the changes are to encourage businesses to permit tenants to use their homes as business premises without running the risk (to the landlord) of the tenants acquiring security of tenure under LTA 1954.

Section 23(4) LTA 1954 states that a tenancy does not attract security of tenure where business use is in breach of a term of the tenancy, unless the landlord has consented to, or acquiesced in, the breach.

Even if the landlord has effectively agreed to the breach (acquiescing), the tenant still does not obtain security of tenure where the business use is solely for the purposes of a “home business”.

If it’s clear that your tenant is seeing clients at the property or using the property as a business, they may be in breach of their agreement.