On 4 September, the Law Commission launched its "14th Programme of Reform". This contains a few projects of interest relevant to the real estate sector, commercial real estate in particular. 

Commercial Leasehold

This project will comprise two sub-projects:

Legislation 

The first sub-project will be a focused review of two pieces of legislation relating to commercial leasehold transactions namely:

• issues with the Landlord and Tenant (Covenants) Act 1995; and
• rights of first refusal under the Landlord and Tenant Act 1987 (in so far as the law relates to commercial premises).

The Law Commission states that aspects of these statutes are "causing significant problems in practice for commercial leasehold transactions, creating barriers for businesses, preventing commercially sound transactions and imposing needless bureaucracy".

Indeed, commercial real estate lawyers would likely agree that both contain unintended consequences that complicate commercial property transactions, with potentially easy-to-fix solutions. These proposals will therefore likely be welcomed. 

Maintenance and repair of leasehold commercial buildings

The second sub-project will be a scoping project, focusing on the law governing the maintenance, repair and upgrading of leased commercial buildings. 

The Law Commission states, "there is concern that the law in this area is causing confusion and unfairness, and that it is has not kept pace with modern priorities (such as the need to improve the environmental sustainability of buildings or to reinvigorate the high street)".

As part of this scoping work, the Law Commission will consider the law relating to dilapidations, service charges, and the interaction between environmental frameworks and commercial leasehold law. Scoping work will enable them to understand the problems that exist and to test which might have a law reform solution.

We await further detail and confirmation of timescales on both sub-projects, following which we will hopefully have greater clarity over the possible changes being considered.  

Other projects relevant to the real estate sector

The Law Commission also included in its programme a number of other projects, some of which will be relevant to the real estate sector:

Management of housing estates

The Law Commission will consider how residents could be given greater control over the management of their housing estates. It will examine whether the right to manage regime that benefits leaseholders in blocks of flats could be adapted to apply to housing estates, and any other solutions. A consultation paper is envisaged for 2026. 

Ownerless land

There will be a review the complex law of bona vacantia and escheat, including the Crown's protection from liability for ownerless land. This will include a consideration as to whether some types of ownerless land should pass to a body other than the Crown and a review of powers of certain parties to obtain vesting orders. The project will also examine the rights of leaseholders where the landlord's title escheats, and the impact of bona vacantia and escheat on the land registration system.

Deeds

The Law Commission will review the law relating to deeds, including their effectiveness, existing requirements (including witnessing, attestation and delivery), and whether amendments to the law are required to ensure the necessary formalities for creating deeds can be facilitated by smart contracts. This project will deal with both deeds executed on paper and electronically.

These projects will run alongside other notable projects which the Law Commission is in the process of consulting on, namely security of tenure under the Landlord and Tenant Act 1954, and chancel repair liability.