Last week the Levelling-up and Regeneration Bill 2022-2023 received its first reading in the House of Commons. The Bill is going to act on several fronts to create a framework for levelling-up, with one such action being to empower local leaders to regenerate towns and cities, restoring the local pride in places.
Part 8 of the Bill called ‘Letting by local authorities of vacant high-street premises’ will apply in England only and is looking to reinvigorate high-streets by making the temporary measures on pavement licensing permanent and allowing local authorities to fill vacant commercial property.
The change to the outdoor seating is designed to make it cheaper and create a more streamlined process to apply for a licence to put furniture on the highway, meaning more shops and food establishments can place tables and chairs at the front or rear of their properties more easily.
With regards to filling vacant commercial properties, the Bill will give local authorities powers to conduct compulsory rental auctions of premises in designated high streets or town centres which have been vacant for more than one year. The Bill also states the qualifying criteria that must be met in order for an area to be designated which includes its suitability for high street use, vacancy conditions and a local benefit condition.
Before a local authority can conduct an auction there will be a two-stage notice procedure with a landlord’s right of appeal. This allows a two-month notice period during which a landlord can provide evidence of a signed lease to prevent a rental auction from taking place. If none is present, then the local authority can serve a final rental auction notice. Whilst this notice is in effect a landlord cannot let the premises without written consent of the local authority which served said notice. The service of the final notice also triggers a two-month auction period for bidders to come forward to lease the premises. This auction process will be governed by regulations with the local authorities having the power to contract as if they were the landlord. Any tenancy agreement entered into through this route will be for a term between 1 and 5 years, contracted outside of the security of tenure provisions and will have deemed consent from any superior landlords and/or mortgagees.
The agreement may also include provisions for works on the part of the landlord. This element in particular may cause issues for both landlord and recently departed tenants alike especially with regards to dilapidation claims. As the new Bill is unlikely to compel owners to do works that are not economically viable in the context of what they are likely to be offered as rent and lease length via an auction.
The Levelling-up and Regeneration Bill still has a long way to go before it comes into force, but could hopefully have the desired effect of putting life back into local town centres and high streets in the coming years.
If you would like to look at the current version of the Bill as it has been introduced into the House of Commons you can find it here: Levelling-up and Regeneration Bill – Parliamentary Bills – UK Parliament
If you are a landlord or tenant looking for advice on the taking or granting of a lease of commercial premises then please do get in touch with our commercial property team on 01206 835316 or email [email protected]