High Street Rental Auctions (HRSAs) offer an opportunity for businesses and community groups to lease underutilised commercial properties in town centres.
Staying updated on the latest legal changes in commercial property is vital, especially as the pandemic has quickened the decline of high streets.
In response, the government introduced new powers on 2 December to rejuvenate high streets by empowering councils to address empty shops.
High street rental auctions (HRSAs)
Local authorities can auction leases for vacant properties, ensuring they remain unoccupied for no more than 365 days within a 24-month period.
The council must be persuaded that using the property for a high street purpose will benefit the local economy, society, or environment. Once established, the rental auction can commence.
How will commercial property be auctioned?
Impact on landlords and business owners
The Act and Regulations might be controversial for landlords, as they limit their freedom to choose tenants, set rents, and manage properties.
Nevertheless, with one in seven high street shops vacant nationwide, the government is motivated to revitalise high streets and prevent long-term vacancies.
The success of the initiative hinges on potential tenants bidding on vacant properties. Long-term vacancies might persist due to high business rates, redevelopment costs, and low footfall. The new rules might encourage owners to lease persistently vacant properties on their terms, avoiding the statutory auction process.
The regulations are significantly altering the high street landscape, making it essential for landlords to familiarise themselves with the new legislation.
Additionally, new opportunities arise for business owners or prospective business owners to establish their presence on high streets.
Having the right legal guidance is crucial. Reach out to our team for assistance.