High Street Rental Auctions & What This Means for Your Property
The Levelling Up and Regeneration Act, which received Royal Assent on October 26, 2023, has introduced a crucial amendment for commercial property owners: High Street Rental Auctions. This new authority gives local authorities the power to compel the rental of persistently vacant commercial properties to new tenants, such as local businesses or community groups. Expected to take effect in mid-2024, these auctions aim to revitalise high streets and town centres by repurposing empty properties.
To be eligible for a High Street Rental Auction, a property must meet the following strict criteria:
* It must be situated within a designated high street or town centre.
* The property must be suitable for high street use, including offices, restaurants, cafes, bars, community halls, and light manufacturing facilities, but excluding warehouses and residential properties.
* The property must have been vacant for the entire preceding 12 months or for at least 366 days within the last two years.
* The local authorities must deem that the property would be beneficial to the local economy, society, or environment if occupied.
These criteria highlight the potential implications for property owners who may be facing vacancy periods or may have vacant properties in the future.
Process and Impact
If a property meets the eligibility criteria and remains vacant, local authorities can initiate a rental auction. This process involves inviting bids from potential tenants and awarding a lease of up to five years to the highest bidder, with no minimum price set. While landlords retain the right to choose which bid to accept, authorities are encouraged to only intervene when landlords are not making sufficient efforts to secure a tenant.
The goal of this process is to ensure that vacant properties are repurposed in a way that benefits the local community, creating a thriving high street atmosphere, generating jobs, and offering new opportunities for local residents. However, this also means that landlords may feel a loss of control over their properties, as they will no longer be able to decide on their own terms how their properties are used.
Trailblazer Programme and Funding
A trailblazer programme will be launched with selected councils, backed by a £2 million fund to help all authorities implement the scheme. This pilot initiative will provide valuable insights and refine the process before a broader rollout.
Next Steps for Landlords
For commercial landlords, this new legislation could present both opportunities and challenges. On one hand, it might facilitate finding tenants for long-vacant properties. On the other, it could feel like an intrusion into property management.
Given the potential implications, it is crucial to stay informed and prepared. Engage with legal experts to understand the risks and benefits specific to your property.
At Thursfields Solicitors, our commercial property team is ready to provide practical advice and keep you updated as more information becomes available.
Contact Us
For further information and personalised advice, please contact Robert Pettigrew at rpettigrew@thursfields.co.uk or call on 0121 796 4022.
Our expert lawyers are here to help you navigate this new landscape and make informed decisions about your commercial property.
