According to the Department for Innovation Business & Skills there are some 4.9m small and medium sized businesses in the UK and, of those, 2.9m are home businesses.Businesses operated from home are of growing importance to the economy, particularly as technology improves and the internet becomes ever more part of our lives.
Where those homes are rented, historically there has been a question mark over whether the tenants enjoy any statutory security of tenure and , if so, is that protection residential or business based?The relevance of the question is that greater protection is afforded to occupiers if they are business tenants than if they are residential tenants.As such, landlords have tended to ensure that residential tenancies forbid any business use at all.This was seen as a wasteful practice by the Government. Accordingly, in one of the last pieces of new legislation before the last election, the Small Business, Enterprise and Employment Act 2015 amended the Landlord & Tenant Act 1954 to provide that security of tenure for business tenancies does not apply to tenancies of dwellings granted to individuals for occupation as homes when those individuals, with the consent of the landlord, carry on a “home business”, namely a business of a kind that might reasonably be carried on at home.
Although the 2015 Act has received Royal Assent (i.e. the Act has been passed), the relevant parts have not yet come into force.When they do so, the new legislation will not be retrospective but the intention is that, henceforth, further growth in the sector will be encouraged.Landlords will have the comfort of knowing that they can accept in their residential tenancies some working at home without the risk of losing control of their properties and will perhaps be more relaxed about allowing such use by their tenants.
If you would like to talk to us at Berwins, please contact any member of the Property team on 01423 509000