Landlords could be fined if they don’t engage with local councils who target their premises for a high street rental auction.
The new initiative means councils can step in to auction off leases on premises that have been vacant for more than a year and grant local businesses and community groups the ‘right to rent’ empty commercial lots at market prices.
Non-statutory guidance explains that properties must have been unoccupied continuously for 12 months, or for at least 366 days (non-continuously) within a 24-month period and that councils must ensure a suitable high-street use would be beneficial to the local economy, society, or environment.
Councils serve an initial notice on the landlord who gets a minimum eight-week grace period and then can’t let the premises without their consent. Councils must also conduct a survey to ascertain a list of works required from the landlord for their premises to reach an agreed minimum standard. The landlord can choose to accept any of the valid bids as the successful bidder.
Th government wants local authorities to work with landlords throughout the rental auction process, if the landlord is willing. The guidance explains: “Much of the process – for example, the auction model – has been designed to allow landlords to input into decisions that determine the details of the tenancy and who the tenant will be. The landlord must however feed in within a timely manner and local authorities are provided powers to proceed unhindered where a landlord does not respond or comply.”
Landlords can be fined up to £2,500 if they don’t reply to requests for information. “It is not in a landlord’s interest to refuse to supply the required information because…where information is not supplied, local authorities are empowered to proceed with the process in default of this information. The lack of information may lead to lower rental bids,” the guidance explains.
The process is expected to take 22 to 24 weeks and councils can apply for a £5,223 New Burdens Payment to cover the auction’s legal, marketing and auction costs.
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