Taking Back Control - Local Authorities' Powers to Rejuvenate the High Street

At the end of last month, a (potentially) important and powerful piece of legislation was given Royal Assent. That Assent may have been overshadowed by the King’s Speech shortly after, which means it has not received very much press outside industry specific corners of the Internet. That legislation is in the form of the Levelling-up and Regeneration Act 2023.

Its purpose is to create major reforms across the built and natural environment of the UK. Planning reform features heavily within the act, as does the attempt to rejuvenate commercial areas of our high streets.

Interestingly, although the Act itself has been given Royal Assent, some of the details of what will be involved will be subject to later regulations.

What might be of particular interest to businesses and commercial landlords is Part 10, which deals with local authorities’ power to take control of vacant commercial premises.

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A local authority has the power to auction off leases for vacant commercial units to the highest bidder if they have been vacant for a period and after a bidding process is triggered.

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It is however possible for a landlord to appeal the decision to auction the leasehold interest, so long as certain criteria are met.

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If a local authority does manage to find a tenant for a premises, and its Landlord has not established the grounds to block the auction, a tenancy will be granted for a period of between one and five years.

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Interestingly, there are no minimum levels of rent provisions within the Act, meaning that it is likely to go to the lowest bidder, even if the rent amount is a nominal one.

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Despite the seemingly Draconian rules, on paper at least, this could assist with ensuring that high streets are not filled with vacant premises. The more vacant premises there are, the lower the footfall which, in turn, causes further businesses to fail and more vacant premises to appear.

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However, whether? local authorities have the wherewithal to put this to practical effect will have to be seen.

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In addition, it may be the case that a premises is unelectable, even for a nominal rent.? Many landlords of sub-prime commercial retail units will rent them at low rates anyway, to ensure the premises is occupied and the business rates are met by someone else.

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The Act may however push those landlords with unrealistic rental expectations to reassess their position.

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