The bidding starts now… Compulsory Rental Auctions
From 2 December 2024, regulations enabling Compulsory Rental Auctions (CRAs) under the Levelling Up and Regeneration Act 2023 apply across England. This initiative aims to revitalize struggling high streets and town centres by addressing long-term vacancies and encouraging productive use of empty premises.
Local authorities will have discretionary powers to designate areas for CRAs, provided the vacant properties meet certain criteria, such as being unoccupied for the whole of the last year (or 366 days in the previous two years). The auction process begins with notices to landlords, who are given a grace period to lease the property themselves. If they fail, councils can organize auctions and lease the properties to successful bidders. The lease itself will be granted by the landlord (or by the local authority on the landlord’s behalf). The rent will be specified by the successful bidder and the term of the lease bill be one to five years with no security of tenure.
Regulations have been passed which detail the process and provide a timetable for the same.
The process is lengthy and time consuming, and it remains to be seen how many CRAs will take place. It may be that service of the notice alone encourages landlords to deal with their property, with an auction being a last resort.
Posted on 12/02/2024 by Ortolan
