Are you a commercial landlord with a vacant property?
If you walk down your local high street, you might notice an increasing number of empty shops. In fact, over 9% of the UK’s high street units have been vacant for more than a year, partly due to rising rents and the shift towards online shopping. To combat this, the government introduced legislation that gives local authorities the right to intervene if a commercial property has been vacant for an extended period.
The Levelling-up and Regeneration Act 2023 – what landlords need to know
Under Part 10 of the Levelling-up and Regeneration Act 2023, which came into force last year, local authorities can arrange an auction of a qualifying commercial property and compel the landlord to grant a new lease to the winning bidder. Some conditions will need to be satisfied for this process to take place, but the local authority will have the power (following the auction) to enter into an agreement for lease and grant a tenancy on behalf of the landlord if the landlord fails to comply. This tenancy may be in a form (and for a use) that a landlord does not want for its property.
What are the conditions?
For a local authority to take such action, specific conditions must be met, including:
- The premises are situated in a designated town centre or high street.
- The commercial property is currently unoccupied and has been vacant for at least 12 months, or at least 366 days during the 24 months prior.
- 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.
What should landlords do?
Commercial landlords should consider taking appropriate measures to avoid losing control over their property’s future. They might look to start actively seeking tenants for their premises; however, improvements might need to be made to the premises first for the property to be lettable. Since April 2023, all commercial properties must have an EPC rating of E or above, so commercial landlords should seek advice to ensure that their premises are compliant with the latest rules and regulations.
Get in touch
If you are a landlord of an empty commercial property and are concerned about how this legislation may affect you and your property, we are here to help. Contact Adam, our Head of Commercial Property, on adam.perin@attwaters.co.uk or call 0203 871 0049.
