Law Commission consultation on business tenancies: modernising security of tenure

We invite the views of consultees as to whether the basis for calculating compensation for non-renewal should change from being based on a multiple of “rateable value” to being based on a multiple of the current rent.

Do consultees foresee particular challenges and/or unfairness in using the current rent in respect of particular rental models (for example, those based on turnover)?

We invite the views of consultees as to whether the calculation of compensation for non-renewal should be based on a system of stepped multipliers. If so, we invite views as to how the system of stepped multipliers should work.

We invite the views of consultees as to whether the multipliers for standard rate compensation (namely, 1 x rateable value) and for higher rate compensation (namely, 2 x rateable value) should be increased or reduced, and if so why.

If a single threshold point for higher rate compensation is retained, we invite the views of consultees as to whether 14 years is still the suitable threshold. If not, what should it be and why?

We invite the views of consultees as to whether the formula for higher rate compensation for non-renewal, and any provisions for stepped multipliers, should be set by secondary legislation.

We invite the views of consultees as to whether the ability to exclude compensation should be abolished, so that all protected tenancies benefit from the right to compensation.

If not, we invite the views of consultees as to whether the threshold for the ability to exclude compensation (when the tenant has occupied for a short period) should remain at 5 years or change. If it should change, what should the threshold be? Please explain why and include any relevant evidence of market practice. 

If the ability to exclude compensation for non-renewal is retained, we provisionally propose that any such exclusion by the parties should be made transparently, in a way that mirrors the requirements for contracting out (see Chapter 3). Tenants would be informed about the exclusion of their right to compensation by prescribed wording within the tenancy. Do consultees agree?

Please explain why.