Reform Commercial Leasing Laws to Create Fairer Terms for Business Tenants

 

To: The UK Parliament

 

We, the undersigned, call upon the UK Parliament to address the unfair balance of liabilities between commercial landlords and tenants. The current system places an undue financial burden on tenants, particularly new startups and small businesses, making it difficult for them to succeed in today’s challenging retail environment.  

 

The Problem

Under the current commercial leasing system, landlords routinely shift the majority of their financial responsibilities onto tenants. This includes not only rent and deposits but also additional costs such as building insurance, legal fees, and even landlord-specific costs. For many small businesses, this creates a significant financial burden at the outset—before they have even begun trading.  

 

Startups and growing businesses must cover a range of costs, including:  

• Equipment and stock purchases  
• Website hosting and maintenance  
• Liability insurance  
• Employee wages  
• Accounting services  
• Rent and large deposits  
• Landlord fees  
• Legal fees for the lease agreement

 

In many cases, landlords require tenants to provide substantial deposits—sometimes up to six months' rent—along with rent paid in advance. Additionally, some landlords demand personal guarantors, who are often required to be homeowners, regardless of type of business, whether a sole trader or limited company. If the tenant's business fails, these guarantors could face significant financial liability, including the risk of losing their homes - as set out by one agency in Beeston, Nottingham.  

 

Rising Rent Costs: A Contributing Factor

Although not the sole cause of this petition, it is important to highlight that we are facing a period of exceptionally high commercial rents. In many areas, rent costs have surged, further contributing to the financial pressure on businesses. This, combined with the other expenses and liabilities forced onto tenants, makes it nearly impossible for many businesses to thrive.  

 

High rent prices place an additional strain on already tight budgets for small businesses and startups, leaving them with little room to reinvest in their operations or grow. For many, the challenge of maintaining profitability under these conditions is becoming insurmountable. This situation exacerbates the issues faced by tenants under current leasing laws and adds urgency to the need for reform.

 

Why Change Is Needed

This system is fundamentally unbalanced, disproportionately benefiting landlords while placing excessive financial risk on tenants. If a business is forced to liquidate, the tenant remains liable for the rent for the remainder of the lease, even while the landlord can re-let the property to a new tenant. This double-dipping creates an unjust situation in which landlords face little to no financial risk, while tenants bear the full brunt of the costs associated with business failure.

 

The current structure discourages entrepreneurship and stifles growth, particularly in areas where retail sectors are struggling, such as Ilkeston and Long Eaton in Derbyshire, and other towns with high vacancy rates in commercial properties.

 

Our Call to Action

We urge the UK Parliament to:  

1. Introduce legal reforms that provide a fairer balance of financial responsibility between commercial landlords and tenants.

2. Cap deposit requirements for commercial leases, ensuring they are reasonable and proportionate to the rental agreement.

3. Limit the use of guarantors, especially where the tenant has provided a substantial deposit or other forms of security.

4. Mandate a review of landlord responsibilities, ensuring they bear a fair share of costs, including insurance and legal fees, rather than passing these expenses onto tenants.

5. Provide additional protections for businesses in the event of liquidation, preventing landlords from penalising former tenants while also benefiting from new rental agreements.

 

By addressing these issues, we can help foster a more supportive environment for start-ups and small businesses, revitalise our high streets, and ensure that commercial landlords play a fair and responsible role in supporting the UK’s economy.

 

Sign this petition to help level the playing field for small businesses and demand fairer commercial leasing laws!

 

We need 10,000 signatures for a formal response from the UK Government.

Any donations will help promote the petition (donations are not awarded to petition host).

Facebook support page: Fair Leases for UK Businesses