B P Collins’ property team examines the new Levelling Up and Regeneration Bill, which will define what is classified as a High Street in the future. Crucially, the Bill proposes that certain vacant properties on the high street should have their tenancies auctioned off by the Local Authority if they are empty for too long. In this article it outlines the process by which this could happen.
What properties will the auction powers apply to?
The Local Authority will have to satisfy the Vacancy requirement and the Local Benefit requirement:
- A Property will be deemed to be vacant if the Property is unoccupied on that day and if the Property was unoccupied for the whole 12 months prior to the day or if the Property was unoccupied for at least 366 days over the previous two years.
- The local benefit condition is satisfied in relation to premises if the local authority considers that the occupation of the premises for a suitable high-street use would be beneficial to the local economy, society or environment.
Where the Local Authority deems the vacancy and local benefit conditions to have been met, they may serve a notice on the landlord of the premises. The notice will expire when a final letting notice in relation to the premises takes effect, or at the end of the period of ten weeks beginning with the day on which the initial letting notice takes effect.
When an initial notice is in place, the landlord cannot, without the written consent of the local authority that served the notice:
- Grant or agree to grant a tenancy or licence to occupy for the Property; or
- Enter into any agreement resulting in another person becoming entitled to possess or occupy the premises
The Local Authority can then serve a final letting notice (which is subject to its own requirements) which means that the landlord cannot, without the written consent of the local authority that served the notice:
- Grant, or agree to grant a tenancy or licence to occupy the premises; or
- Enter into any other agreement resulting in another person becoming entitled to possess or occupy the premises.
The Landlord can serve a counter notice appealing the notice served by the local authority within 14 days beginning with the day on which the final letting notice takes effect.
A rental auction is the process for finding someone who would be willing to take a tenancy of the Property.
The full regulations as to the process of auctioning the tenancy are still to be ironed out by the Government. However, we do know the following:
- That the term will be between one and five years
- The lease will be contracted outside of the Landlord and Tenant Act 1954
- There will be certain prescribed covenants to be included in the lease (although these are yet to be detailed)
- That the property be used for the use specified by the local authority ahead of the rental auction.
Whilst there is still a lot to be finalised by the Government in relation to the Bill and the empty high street, the Bill was moved to its second reading on 8 June by Michael Gove the Secretary of State for Levelling Up, Housing and Communities and Minister for Intergovernmental Relations. During this reading, there was a large amount of support for the proposals relating to the high street with many seeing these steps to be a key step towards levelling up.
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