The Government this week announced plans to introduce legislation to tackle the issue of empty stores on high streets.
The new measures are set to be laid out in the Levelling Up and Regeneration Bill in the coming weeks, and will require landlords to rent out commercial premises where they have been vacant for at least six months. If a new tenant can't be found, it is proposed that local authorities will be able to force a Compulsory Rental Auction.
The proposals aim to revitalise town centres, where it is well known that retailers and their landlords have had to contend with incredibly turbulent circumstances over the last few years. The plans are designed to allow local, independent and community-led businesses the opportunity to take commercial premises where landlords have not been able to re-let.
However, there are inevitably myriad potential issues and questions with a scheme as this, and much will need to be clarified when the Government's plans are set out in full. A key concern for landlords is that there are a vast range of reasons why a retail unit may be vacant for a period of time, besides a landlord holding out for a high rent - a landlord may have plans to redevelop, or a tenant who still has a lease may no longer have a viable business to trade.
Landlords have, particularly since the pandemic, taken far more innovative and creative approaches to place-making and collaboration with tenants. These proposals appear to take away an opportunity for such approaches.
Understandably, the announcement has been met with scepticism and uncertainty. Detailed consideration of the processes will be required when the Bill is introduced in due course.
Under the proposed laws, set to be introduced next month as part of the Levelling Up and Regeneration Bill, local authorities would be able to invite bids from prospective occupiers through an auction process.