Tenancy at Will 1954 Act: Does Security of Tenure Apply?

Managing commercial property means that you’ve likely faced a situation where your timing doesn’t align well. You might have a tenant who needs early access to the property, or you have an existing occupier who needs a few extra days while you iron out a formal renewal. In these fast-moving situations, you need a flexible arrangement without getting bogged down in endless legal paperwork.

That is usually where a tenancy at will under the 1954 Act comes into play. But whenever an occupier takes possession of commercial space, one crucial question pops up: Does the tenant automatically gain statutory rights to stay?

The quick answer is no. Here, we’ll break down how a tenancy at will works, why it falls outside statutory renewal rules, and how to use one safely without accidentally handing over long-term tenant rights.

If you are brushing up on overall property management rules, check out our baseline breakdown of commercial landlord advice basics.

What Exactly is a Tenancy at Will Under the 1954 Act?

In plain English, a tenancy at will under the 1954 Act is an informal, temporary legal arrangement that allows an occupier to use a commercial property with the owner’s explicit consent.

According to HMRC and standard RICS guidelines, either party may terminate the tenancy at will at any time. Here’s what you need to know about a tenancy at will:  

• A tenancy at will does not generally create a leasehold interest with a fixed term or security of tenure.
• The tenancy at will can’t be transferred or assigned to a third party.
• Has no fixed end date or agreed term length.
• It is entirely dependent on the ongoing consent of both parties. 

Read our overview of commercial property rights for tenants for more information on standard commercial lease structures. 

Does Security of Tenure Apply Under the 1954 Act?

The law is clear when it comes to evaluating a tenancy at will under the 1954 Act status. Tenancies at will are not included in security of tenure under Section 43 of Part 2 of the Landlord and Tenant Act 1954. (gov.uk)

This means the occupier does not get an automatic legal right to renew their tenancy or remain in the property once you ask them to leave.

How it Differs from Contracting Out a Standard Lease

It is important not to confuse a tenancy at will with the formal procedure for excluding security of tenure in commercial lease agreements.

When you grant a standard fixed-term lease and want to exclude 1954 Act protection, you must follow a strict statutory process under the Regulatory Reform (Business Tenancies) Order 2003. 

This involves serving a formal health warning notice on the tenant and obtaining a signed statutory declaration before the lease is completed.

A true tenancy at will skips that formal health warning process entirely. Because it is excluded by its very nature under Section 43, security of tenure never attaches to it in the first place.

Why Do Commercial Landlords Use Tenancies at Will?

Either party can end the lease on demand without formal notice, which means that a tenancy at will is a handy stop-gap tool. Landlords commonly use them in three main scenarios:

1. Early access for fit-out: Allowing a new business to move in to be able to start decorating or installing trade fixtures while solicitors finalise the main lease. 
2. Ongoing lease negotiations: enabling an existing tenant to stay in occupation on a temporary basis while you negotiate new lease terms. 
3. Pending sales: Giving a prospective buyer interim access to a unit before financial completion.

Tenancy at Will vs. Protected Commercial Lease

Here is a quick snapshot comparing a temporary tenancy at will against a full, protected business lease:

When a Temporary Arrangement Drifts

While a tenancy at will sounds like the ideal risk-free setup, sloppy management can turn it into a major headache.

If lease negotiations stall or cease completely, but you allow the tenant to stay for months on end while accepting regular weekly or monthly rent, a court may decide that the tenancy at will has ended and an implied periodic tenancy has been created.

If a judge rules that an implied periodic tenancy exists, the occupier instantly gains Part II security of tenure. As the landlord, you may need to follow the statutory renewal and termination process under the 1954 Act.

To understand the formal notice windows required for standard tenancies, see our guide on commercial property notice to vacate and review how much notice a landlord has to give.

How to Keep Your Tenancy at Will Safe

To make sure your temporary holding arrangement doesn’t backfire, follow these practical ground rules:

1.1. Put the Agreement in Writing

Always use a professionally drafted written tenancy at will that explicitly states that either party can terminate the arrangement at any time.

2.2. Keep Main Lease Negotiations Moving

Ensure active, documented progress is being made on the main lease draft. If negotiations stop, the tenancy at will becomes vulnerable to legal challenge.

3.3. Be Smart About Payments

Label payments as “occupation fees” or “mesne profits” rather than accepting rent for long, fixed periods in advance.

4.4. Terminate Promptly If Talks Fail

If the tenant decides not to proceed with the main lease, terminate the tenancy at will immediately in writing and take back vacant possession.

If you need any more advice on how to protect your rental property, be sure to visit our advice centre. Also, if you’re looking for landlord insurance to protect your property from financial risk, get in touch with our team of specialists at CIA Landlords.