First-tier Tribunal costs change for business tenancies from 30 July 2026

If you run a shop, studio or small office, this is the kind of legal change that can pass quietly and still matter. According to the statutory instrument published on legislation.gov.uk, these rules were made on 7 July 2026 and laid before Parliament on 9 July 2026. The change itself is short but important. It adds business tenancy proceedings under Part 2 of the Landlord and Tenant Act 1954 to the list of cases where the Property Chamber of the First-tier Tribunal may make an order for costs. In plain English, some disputes about business leases may now come with a clearer risk that the tribunal could tell one side to meet costs, once the linked jurisdiction regulations take effect on 30 July 2026. (statutoryinstruments.parliament.uk)

If statutory instruments are new to you, think of them as the detail work of law-making. Parliament passes an Act with the broad rules, then ministers or rule committees use statutory instruments to sort out procedure, timing and technical amendments. That is why the opening lines matter here: the Tribunal Procedure Committee says it made these Rules using powers in the Tribunals, Courts and Enforcement Act 2007, and the Lord Chancellor allowed them. A helpful reading tip is this. 'Made' means the rule has been formally signed. 'Laid before Parliament' means it has been placed before MPs and peers. 'Coming into force' tells you when it starts applying in real cases. Many statutory instruments use the made negative procedure, which means they become law without a vote first unless Parliament objects. (api.parliament.uk)

The tribunal at the centre of this is not a regular county court. The First-tier Tribunal is a specialist decision-making body, and the Property Chamber deals with a range of disputes about property and land. Explanatory material on legislation.gov.uk describes it as the specialist forum for these kinds of cases, with appeals going on to the Upper Tribunal. (legislation.gov.uk) That matters because where a case is heard can shape cost, speed and strategy. A tribunal is often presented as simpler and more accessible than court, but procedure still matters. Once the rulebook gives a tribunal power to make costs orders in a new kind of case, the feel of that litigation can change very quickly.

The legal phrase doing a lot of work here is 'Part 2 of the Landlord and Tenant Act 1954'. That part of the 1954 Act is the well-known section on 'security of tenure for business, professional and other tenants'. In everyday terms, it covers rules that can protect a business tenant when a lease ends and can govern whether a new tenancy should be granted. (legislation.gov.uk) The easiest way to read this amendment is as a two-step move. One 2026 regulation gives the First-tier Tribunal and Upper Tribunal jurisdiction to hear certain proceedings under Part 2 of the 1954 Act. This amending rule then adjusts the tribunal’s own procedure rules so those cases sit inside the costs framework in rule 13(1). (statutoryinstruments.parliament.uk)

Here is the sentence you really need to notice: the tribunal may make an order for costs. The word 'may' does the heavy lifting. This is not the same as saying the losing side will always pay, and it does not create a simple automatic rule. What it does mean is that landlords, tenants and advisers can no longer treat these tribunal cases as if costs risk is obviously off the table. If you are bringing or defending a business tenancy claim, you would want to think more carefully about the strength of your case, the documents behind it and the value of settling early.

There is also a wider policy story in the background. The linked jurisdiction regulations sit under the Product Security and Telecommunications Infrastructure Act 2022, which made amendments to the 1954 Act in this area. So this is not just a random wording fix. It is part of a larger change in where certain disputes are heard and how they are handled. (statutoryinstruments.parliament.uk) This is why small procedural amendments deserve attention. A few inserted words can alter behaviour long before any headline ruling appears. Businesses may budget differently, legal advisers may warn differently and weaker claims may be pushed towards settlement sooner.

The explanatory note says no full impact assessment was produced because no significant effect on the private, voluntary or public sector was expected. That may be true at system level, but it is worth pausing on. For a small business with a lease dispute, even a modest chance of a costs order can affect whether it feels able to fight the case at all. So the lesson here is bigger than one tribunal rule. When you read a statutory instrument, look for the verb, the date and the forum. In this one, the key verb is 'may', the key date is 30 July 2026, and the key forum is the First-tier Tribunal’s Property Chamber. Put those three together and you can see why a short legal text could still matter in the real world. (statutoryinstruments.parliament.uk)