Insights Commercial Property Law – Key Considerations (July 2023)


Our July 2023 summary of the latest developments in Property law and practice is as follows:

Following on from last months’ update, the technical consultation on the new Infrastructure Levy in England has now closed. The consultation which closed on 9 June 2023 aimed to “inform the design of the Levy and of regulations that will set out its operation in detail”.

Subsequently, there will be further consultations on the details of the draft regulations, and we will be reporting on these updates in due course.

The Levy will eventually replace Community Infrastructure Levy and help fund infrastructure at a local level, including roads, transport, flood defences, schools, emergency, and rescue services, etc.

The Government is consulting on the introduction of a new High Street Rental Auctions system. The system would grant local authorities the power to require landlords to rent out “persistently vacant” commercial properties (being a property that has been vacant for longer than 12 months in a 24-month period) to new tenants, such as local businesses or community groups.

The power to be given to local authorities is a discretion, which is not intended to apply to landlords who are actively seeking to fill its premises. If the power is used, a vacant property can be put out to auction, and the successful bidder would enter into agreement for lease, upon completion of the auction, with a lease being granted for a term of between one and five years and contracted-out of the Landlord and Tenant Act 1954 (meaning, the tenant will not benefit from the automatic right to renewal at expiry of the lease term). The amount of rent payable by the tenant will be determined through the rental auction.

However, it is unlikely that the auction will be of the traditional kind – most auctions adopt a ‘highest bidder wins’ policy, however the consultation seeks views that this may not be the most appropriate mechanism for high street rental auctions as lower bids may have other factors that are more valuable.

The consultation suggests that as vacant properties are often in a dilapidated state, it is proposed that the minimum energy efficiency standard requirements may be relaxed on such lettings.

Consultation closed on 23 June 2023 and we shall be reporting updates accordingly.

The Department for Environment, Food & Rural Affairs has published brief guidance on what is about to count towards a developer’s required contribution to biodiversity net gain on new developments.

Biodiversity net gain is expected to come into full force from November 2023 and will require that all future development projects in England (subject to a few exceptions) will be required to deliver a minimum 10% Biodiversity net gain, to be maintained for a period of at least 30 years.