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Geoffrey Waterson: Principal Lecturer in property law at the University of Portsmouth and is the Legal Editor of Property Management
Readers will be familiar with the long and increasingly tangled chain of events which has led up to the enactment of this important piece of reforming legislation, and which has been generally quite well documented in the professional journals (see, for example [1] and references therein contained). The law relating to privity of contract insofar as it imposed a continuing liability on the original lessee even after assignment had been regarded as unsatisfactory for some time and the Law Commission had, after consultations, recommended substantial modifications to existing law and practice. The new Act received the Royal Assent on 19 July 1995, and is expected to be brought into operation at the beginning of 1996.
The most important single point to make about the Act, however, is that it is not a "root and branch" reform of the law covering both old and new tenancies alike, but applies in the main only to new tenancies. A "new tenancy" for the purposes of the Act is defined by section 1(3) of the Act as a tenancy "granted on or after the date on which [the] Act comes into force otherwise than in pursuance of (a) an agreement entered into before that date, or (b) an order of the court made before that date". This definition is extended for the avoidance of doubt to include the situation where there is a deemed surrender and regrant by virtue of any variation of an existing tenancy (see section 1(5)). Tenancies granted in pursuance of an option granted before the date on which the Act comes into force, however, are regarded as having been "granted in pursuance of an agreement entered into before that date" regardless of when the option was actually exercised (see section 1(6)). By implication, the same principle would also apply in the case of a deemed surrender and regrant where the agreement which provided for the variation of the original tenancy preceded that date also, although this is not set out expressly in the Act.
Provisions relating to both new and existing tenancies
Before going on to deal with the principal provisions of the Act,...