What the Levelling-up And Regeneration Act 2023 means for empty commercial premises
The Levelling-up and Regeneration Act 2023 includes the radical concept of allowing local authorities to require the compulsory auction of empty commercial property. This new legislation includes a mechanism whereby the owner of vacant commercial premises will be bound to grant a lease to a successful bidder, whether or not the owner wishes to dispose of the premises.
The changes introduced by the Levelling-up and Regeneration will no doubt have a huge impact on the possible actions and choices of private property owners and these companies and individuals should therefore stay informed about what the Act might mean for them.
When will the Levelling-up & Regeneration Bill become law?
The Levelling-up & Regeneration Act was first introduced and read in the House of Commons on the 11th May 2022. It received Royal Assent on the 26th of October 2023 and therefore became law as of this date. However, the legislation only sets out a high-level framework and significant detail is awaited concerning many of the aspects that concern property owners and empty commercial premises.
Secondary legislation will provide greater clarity as to how the changes will be delivered, but the principle is clear that local authorities will now take matters into their own hands to revitalise their high streets in instances where private property owners allow their properties to remain empty for a period of time.
Who does the Levelling-up & Regeneration Act 2023 apply to?
The requirement for the compulsory auction of empty commercial property will only apply in relation to areas designated by the local authority as a high street or town centre. This designation is based upon the importance of the area to the local economy by virtue of the concentration of high street uses and predominantly includes shops, offices, restaurants and other places of public recreation.
Both the “vacancy condition” and the “local benefit condition” will need to apply. The premises must have been vacant for the entirety of the previous year or for a minimum of 366 days over the previous 2 years. If these conditions apply, the local authority can force the auction of the premises pursuant to which a lease of between 1 and 5 years will be granted to the successful bidder. The contract created will then be binding on the owner of the premises, with the local authority having the power to grant the lease if the owner of the property fails to do so.
What should commercial property owners do next?
While we are still waiting to see how these processes will apply in practice, it is wise for property owners to plan ahead and consider the possible implications of leaving commercial premises empty for extended periods.
The commercial property team here at GA Solicitors in Plymouth has expertise in acting for landlords and tenants and are best placed to assist you in avoiding the risk of such local authority intervention with your commercial premises.
Our experienced solicitors can offer clear and effective legal advice to help you adjust to new legislation. Call 01752 203500 or email enquiries@GAsolicitors.com for an initial discussion. You can also contact me directly via david.stone@GAsolicitors.com
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