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Security of Tenure: Essential legal insights for hotels, restaurants, and bars
August 5, 2025
By Elin Davies
Businesses in the hospitality and tourism sector are often highly location-dependant and rely heavily on their physical presence to attract and serve customers. As such, the premises are a vital asset that can directly impact a business’s success and must be protected.
It is therefore essential for hospitality and tourism businesses to understand the concept of security of tenure in their commercial leases and recognise its importance. Our commercial property expert, Elin, outlines key legal insights for hospitality and tourism business owners.
What is security of tenure?
Security of tenure is a statutory protection granted under the Landlord and Tenant Act 1954. It provides commercial tenants the legal right to remain in their business premises after the lease term has expired and to request a new lease on similar terms. This protection significantly strengthens a tenant’s negotiating position at the end of the lease.
Importantly, landlords can only refuse to grant a new lease on specific statutory grounds, such as:
Why is it important for businesses?
Having a commercial lease protected by security of tenure offers long-term stability and reduces the risk of unexpected lease termination. This enables business owners to:
In the hospitality and tourism sector, securing a prime location is especially important due to the industry’s reliance on foot traffic, visibility, and proximity to key attractions. Additionally, security of tenure helps businesses avoid the substantial costs and disruptions associated with relocating.
In such a competitive industry, losing a well-located premises can significantly affect a business’s revenue and brand recognition, which can be both financially and strategically damaging.
What is “contracting out” of security of tenure?
Since security of tenure is a statutory right, it is automatically included in most commercial leases.
However, this right can be contracted out if both the landlord and tenant agree to do so before the lease is completed.
Risks of contracting out
Before agreeing to a lease that excludes security of tenure, businesses should understand the legal rights that they are giving up:
While a contracted-out lease may be suitable for short-term or temporary arrangements, it should only be agreed upon after careful consideration and with the support of professional legal advice.
For businesses in the hospitality and tourism sector where location, continuity, and customer familiarity are crucial, lease negotiations should be approached with a clear understanding of long-term goals and legal implications. Whether negotiating a lease renewal or considering contracting out of statutory protections, seeking professional legal guidance is crucial to protect the future of the business.
To speak with a commercial property expert on this or a related topic, please contact us on 02920 829 100 or via our Contact Us form.
To speak to one of our experts today, please contact us on 02920 829 100 or by using our Contact Us form for a free initial chat to see how we can help.
