Contracting Out of Security of Tenure: The 14-Day Fork

The most common misconception about contracting out of security of tenure is that the fourteen days is a deadline. It is not. Missing it does not invalidate the exclusion. It changes which declaration the tenant has to make — and a firm that treats fourteen days as a cut-off, or that uses the wrong declaration because it has not noticed the notice went out late, has produced a void agreement and a tenant with full security of tenure.

This is one of the highest-frequency negligence traps in commercial property practice, and it is almost entirely avoidable by reading three paragraphs of a 2003 statutory instrument.

The statutory architecture

Security of tenure for business tenancies comes from Part II of the Landlord and Tenant Act 1954. Sections 24 to 28 are what the parties are excluding when they contract out.

The mechanism is section 38A, inserted by the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003 and in force from 1 June 2004. Section 38A(1) permits the parties to a fixed-term business tenancy to agree to exclude sections 24 to 28 — but the agreement is void unless the landlord has served the notice set out in Schedule 1 to the 2003 Order and the requirements of Schedule 2 have been met.

Section 38A(2) does the same for agreements to surrender, with its own notice and requirements in Schedules 3 and 4. That second limb matters more than it gets credit for: plenty of firms have a disciplined contracting-out process and no process at all for surrenders.

The fork, in the words of the instrument

Schedule 2 paragraph 2 sets the fourteen days:

"Subject to paragraph 4, the notice referred to in section 38A(3)(a) of the Act must be served on the tenant not less than 14 days before the tenant enters into the tenancy to which it applies or (if earlier) becomes contractually bound to do so."

Paragraph 3 then deals with the case where that requirement is met. The tenant, or a person duly authorised, must before entering into the tenancy or becoming contractually bound "make a declaration in the form, or substantially in the form, set out in paragraph 7" — the simple declaration.

Paragraph 4 deals with the case where it is not met. The notice must still be served before the tenant enters into the tenancy or becomes contractually bound, "and the tenant, or a person duly authorised by him to do so, must before that time make a statutory declaration in the form, or substantially in the form, set out in paragraph 8."

So: fourteen days met, simple declaration. Fourteen days not met, statutory declaration sworn before an independent solicitor or commissioner for oaths. Either route produces a valid exclusion. Choosing the wrong one does not.

A small authority-signal for anyone checking the source: paragraph 4 as printed contains a typographical error, reading "contactually" rather than "contractually". It is in the instrument as made.

Where it actually goes wrong

Four failure modes account for most of the problem.

Counting from the wrong date

Both paragraphs turn on the earlier of entering into the tenancy and becoming contractually bound to do so. Where there is an agreement for lease, the clock runs to exchange, not to completion of the lease. A notice served ten days before exchange and three weeks before the lease is a late notice, and the tenant needs a statutory declaration.

Treating fourteen days as working days

It is fourteen days. There is no provision for waiver by the tenant, however commercially willing the tenant is, and no discretion to excuse a short period.

Using the simple declaration on a late notice

This is the one that produces the void agreement. If the notice went out inside fourteen days and the tenant signed a simple declaration, paragraph 3 was never available and the Schedule 2 requirements were not met. Section 38A(1) then bites: the exclusion is void and sections 24 to 28 apply.

Forgetting surrenders

An agreement to surrender runs the Schedule 3 and 4 gauntlet separately. A contracting-out checklist that does not cover surrenders leaves the same exposure untouched.

Firms running volume commercial work should treat "which declaration, and why" as a mandatory file note rather than something inferred later from dates. The point of failure is usually not ignorance of the rule but the absence of a recorded decision.

The renewal and termination timetable

Where the tenancy has not been contracted out, section 25 governs the landlord's notice. The notice must be in the prescribed form, and under section 25(2) must be given "not more than twelve nor less than six months before the date of the termination specified therein". Section 25(3)(b) can extend the twelve-month limit where more than six months' notice to quit would otherwise be required.

Two further requirements are easy to overlook. Under section 25(6) the notice has no effect unless it states whether the landlord is opposed to the grant of a new tenancy. Under section 25(7), if the landlord is opposed, it has no effect unless it also specifies one or more of the section 30(1) grounds. The prescribed forms are in the Landlord and Tenant Act 1954, Part 2 (Notices) Regulations 2004.

What the Law Commission is and is not doing

There is a live reform project, and it is widely misdescribed. The Law Commission's "Business tenancies: the right to renew" was referred in March 2023. Consultation Paper 1 was published on 19 November 2024 and closed on 19 February 2025. An interim statement followed on 4 June 2025. Consultation Paper 2 was published on 16 June 2026 and closed on 16 September 2026.

The provisional conclusion, stated on the project page, is that "There should be no change to the model of security of tenure. The existing contracting-out model should remain." The interim statement records that consultees generally favoured keeping the current law and that the Commission provisionally agrees.

No final report has been published. Nothing has been enacted. The 1954 Act and the 2003 Order are unchanged, and anyone telling a client that contracting out is about to be abolished is wrong.

One provisional proposal is worth tracking: the interim statement concluded that the six-month exclusion threshold should be increased, with consultation expected on raising it to two years. If that happened it would materially change which short leases fall outside the Act altogether — which would be a bigger practical change than anything proposed about the contracting-out machinery itself.

Competence, not hours

There is no commercial-property-specific CPD requirement in England and Wales. The SRA prescribes no minimum hours; the obligation is to reflect on your practice and address identified learning needs, declared annually on practising certificate renewal. Our guide to SRA continuing competence sets out what that declaration commits you to.

The absence of a prescribed syllabus is the point. Where a rule is this mechanical and this unforgiving, the competence evidence that matters is a documented firm process — not a certificate. For the residential side of the same discipline, our CQS 2026 requirements guide covers the Conveyancing Quality Scheme standards, and the residential landlord and tenant update deals with the Renters' Rights Act changes.