The Local Authorities (Rental Auctions) (England) and Town and Country Planning (General Permitted Development) (Amendment) Regulations 2024

• (1) A requirement for the tenant to make good any failure to repair, clean or decorate the premises of which the landlord has given written notice to the tenant.

• (2) A requirement for the tenant to start any work required under sub-paragraph (1) before the end of the period of one month starting on the date on which the landlord gave written notice under sub-paragraph (1), or sooner if required.

• (3) A requirement that, if the tenant fails to—

• (a) comply with provision made under sub-paragraph (1) or (2), or

• (b) carry out the work diligently,

the tenant must pay on demand (as a debt) the cost to the landlord of carrying out the work.

Use

12

A requirement for the tenant not to use the premises other than for the permitted use identified in the particulars of the tenancy under paragraph 1.

Nuisance etc

13

A requirement for the tenant—

• (a) not to do anything inside or outside the premises which might cause a nuisance, damage or injury to the landlord or others;

• (b) not to do anything which might overload the floors of the premises, or any conduits serving the premises;

• (c) to take all necessary steps to keep the premises free from pests.

Disposal

14

• (1) A requirement for the tenant not to—

• (a) assign, sublet, hold on trust, charge, or

• (b) part with or share the possession or occupation of,

the whole or any part of the premises save that the tenant may assign this tenancy with the prior written consent of the landlord (such consent not to be unreasonably withheld or delayed).

• (2) In the event that the tenant wishes to assign this tenancy, a requirement for the tenant to—

• (a) ensure all rent is paid up to date to the date of assignment;

• (b) enter into an authorised guarantee agreement to guarantee the future performance of the assignee’s obligations where reasonably requested by the landlord.

• (3) A requirement that, as soon as practicable following an assignment, the tenant must notify the landlord in writing and at the same time provide a true copy of the completed assignment.

Compliance with statutory requirements

15

• (1) A requirement for the tenant to comply with the requirements of any statute or law affecting the premises or its use.

• (2) A requirement for the tenant, as soon as the tenant receives any notice affecting the premises from an authority, to—

• (a) supply the landlord with a copy,

• (b) comply with the notice, and

• (c) make such representations about the notice as the landlord reasonably requires.

• (3) A requirement for the tenant as soon as practicable to give written notice to the landlord on becoming aware of any defect in the premises.

Tenant’s insurance duties

16

• (1) A requirement for the tenant—

• (a) to pay a fair proportion of the costs incurred by the landlord in insuring the premises in accordance with the landlord’s obligations in provision made under paragraph 25;

• (b) to comply with all requirements of the insurers about the premises;

• (c) not to do anything which could adversely affect any insurance policy covering the premises.

• (2) Provision that, if the landlord fails to insure the premises in accordance with its obligations in this tenancy, the tenant may insure the premises for its full reinstatement value.

• (3) A requirement for the tenant—

• (a) to provide the landlord with a copy of the insurance policy arranged by the tenant under provision made under sub-paragraph (2) as soon as the insurance is arranged;

• (b) at the direction of the landlord to terminate its cover, where the landlord places cover in accordance with its obligations in provision made under paragraph 25.

• (4) Provision that—

• (a) whilst the tenant is insuring the premises, the tenant—

• (i) does not benefit from any exclusion in its obligation to keep the premises in repair where damage is caused by an insured risk, and

• (ii) must arrange reinstatement of the premises as soon as possible following damage by an insured risk;

• (b) provision made under paragraph 26 is not to apply when the tenant is insuring the premises.

Planning

17

A requirement that the tenant does not apply for planning permission for the premises save—

• (a) in relation to signage and then only with the prior written consent of the Landlord (such consent not to be unreasonably withheld or delayed), or

• (b) with the landlord’s agreement.

Yielding up

18

A requirement that at the end of the tenancy (however its ends) the tenant must—

• (a) deliver all keys of the premises, and

• (b) yield up the premises with vacant possession to the landlord and in accordance with the tenant’s obligations under this tenancy.

Encroachments and rights

19

A requirement for the tenant, so far as possible, to—

• (a) preserve all rights enjoyed by the premises, and

• (b) help the landlord prevent anyone gaining any right over the premises.

Landlord’s costs

20

A requirement for the tenant to pay on demand, the Landlord’s reasonable costs for—

• (a) preparing and serving notices or proceedings under section 146 or 147 of the Law of Property Act 1925²³ (even if forfeiture is avoided);

• (b) preparing and serving any schedule of dilapidations;

• (c) the recovery of any arrears of rent or other sums due from the tenant;

• (d) any application for the landlord’s approval (whether approval is granted or refused) except where the landlord acts unreasonably;

• (e) remedying any breach by the tenant of the terms of this tenancy.

Deposit

21

• (1) A requirement for the tenant to pay the deposit specified in the particulars of the tenancy under paragraph 1.

• (2) Provision entitling the landlord or the landlord’s agent to hold the deposit as security against any loss to the landlord because of the tenant’s default in its obligations under this tenancy.

• (3) After deduction from the deposit of any sums required to compensate the landlord for any default by the tenant of its obligations under this tenancy (which deduction the tenant irrevocably and by way of security authorises the landlord or the landlord’s agent to make), any balance remaining is payable without interest to the tenant within 14 days of the end of the tenancy.

Regulations

22

An obligation for the tenant to comply with all reasonable regulations for the proper management of the premises as are made by the landlord and notified to the tenant in writing.

PART 3 — Landlord’s obligations

Peaceful enjoyment

23

A statement that the landlord agrees that the tenant may peaceably enjoy the premises without any interruption by the landlord or any person claiming under the landlord.

Repairs and service charge

24

• (1) Where the premises form part of a building larger than the premises, provision must be made for the cost of repairs to anything outside the premises which enables or facilitates the use of the premises in the form of one of the following options, as the local authority considers appropriate, taking into account any representations made by the landlord under regulation 8.

Option 1 2 An obligation for the landlord— a to keep the remainder of the building in such state of repair as will not interfere with the tenant’s ability to trade from the premises; b to carry out any repair necessary to comply with paragraph (a) as soon as reasonably possible on becoming aware of the need for the repair.

Option 2 3 The service charge is the tenant’s fair proportion of the cost to the landlord of providing the services (“the service expenditure”), reasonably determined by the landlord’s surveyor, which comprises— a the costs reasonably incurred by the landlord in delivering the services; b reasonable fees paid to managing agents or charged by the landlord for management of the building and, if the landlord provides the chartered accountant’s certificate mentioned in sub-paragraph (6), the chartered accountant’s proper fees; c any other costs reasonably incurred by the landlord in carrying out works or providing services or amenities decided by the landlord in good faith in accordance with good estate management for the benefit of all the occupiers of the building. 4 The tenant will pay to the landlord within fourteen days of demand and on no more than four occasions in each year, such sums on account of the service charge as the landlord or the landlord’s surveyor estimate in good faith. 5 The landlord will give the tenant a detailed statement showing the service expenditure and service charge for the period (not being more than a year) since the start of the term or the date at which the last statement was prepared, and within twenty-one days from receiving that statement the tenant will pay any shortfall between the service charge shown on the statement and any sums paid on account under paragraph (4). 6 The landlord must keep proper records of the service expenditure and in respect of each statement the landlord (at his election) must either give the tenant a reasonable opportunity to inspect the relevant records, invoices and receipts or give the tenant a certificate by a chartered accountant stating that the sums set out in the statement are supported by records, invoices and receipts produced to him. 7 Any dispute concerning the service expenditure or the service charge must be referred to the decision of an independent surveyor to be appointed by the landlord and the tenant jointly or (in the absence of a joint appointment) at the request of either the landlord or the tenant by the President for the time being of the Royal Institution of Chartered Surveyors and the independent surveyor must act as an arbitrator in accordance with the Arbitration Act 1996²⁴.

Option 3 8 Provision for a service charge regime which is substantially similar to the service charge regime contained in— a the landlord’s own leasehold interest, b other leases of the building, of which the premises form part, c in the case of a shopping centre, other leases of the Centre, of which the premises form part, or d other leases of any adjoining premises in which the landlord has an interest.

Services 9 Where provision is made for a service charge in the form of option two, the tenancy must include a requirement that the landlord provides the following services for the premises as follows— a whenever necessary (or when the landlord, acting in good faith, considers desirable) repair and where appropriate decorate the common parts, main structure, foundations, roof and exterior of the building (except for any shopfront or fascia which is the responsibility of any tenant) and any conduits which serve the premises in common with any other part of the building; b clean the common parts; c if the necessary installations exist at the date of this tenancy, provide during normal business hours hot water, lighting of the common parts, lift service and/or (when ambient temperatures so required) central heating; d pay a fair proportion of the cost of repairing, maintaining and cleaning any party walls or structures and any roads, paths, yards and conduits serving the building in common with other premises, and in this paragraph, “services” means the services provided by the landlord in fulfilment of this requirement.

Insurance

25

• (1) A requirement for the landlord—

• (a) to insure the premises or, where the premises form part of a building, that building against the insured risks in full reinstatement value with reputable insurers, and

• (b) to arrange for the reinstatement of the premises or, where applicable, the building, as soon as reasonably practicable following damage by an insured risk.

• (2) Provision that the obligation to reinstate does not apply where—

• (a) a valid notice has been given under provision made under paragraph 26,

• (b) the tenant is in breach of provision made under paragraph 16, or

• (c) insurance against a particular risk becomes unavailable or available only at a cost which is unreasonable in the landlord’s opinion acting reasonably.

• (3) A requirement for the landlord to give the tenant details of such insurance on request.

PART 4 — Other provisions

Damage

26

Provision that if the whole or a substantial part of the premises becomes unfit for use or inaccessible then—

• (a) (unless any insurance money has been refused because of the tenant’s default) a fair proportion of the rent, as reasonably determined by the landlord’s surveyor, is to be suspended until access and fitness for use are restored, and

• (b) the landlord or the tenant may end the tenancy by giving notice in writing to the other, in which case any insurance money will belong to the landlord, but the tenant is not entitled to end the tenancy if the tenant has caused the damage or vitiated the insurance.

Forfeiture

27

Provision that the landlord may, by re-entering any part of the premises, forfeit the tenancy, but without prejudice to any other rights or remedies of the landlord or the tenant, if—

• (a) any amounts are unpaid 14 days after becoming payable under the tenancy (whether formally demanded or not),

• (b) there is a breach by the tenant of any term of the tenancy,

• (c) the tenant suffers any enforcement by seizure of assets at the premises, or

• (d) anyone takes any step whatsoever towards insolvency of the tenant.

Schedule of condition

28

• (1) A requirement that—

• (a) as soon as reasonably practicable following the date of the tenancy, the tenant must undertake and finalise a schedule of condition;

• (b) within 5 working days of completion of the schedule of condition to the tenant’s reasonable satisfaction the tenant must supply the landlord with a copy of the schedule of condition.

• (2) Provision that, within 5 working days of receipt of the schedule of condition, the landlord may—

• (a) give the tenant notice that the schedule of condition is final and binding for the purposes of the tenancy (in which case the parties must each sign a counterpart of the schedule of condition recording it and each attach a copy to the tenancy and counterpart), or

• (b) give the tenant notice that the schedule of condition is not agreed as final and binding for the purposes of the tenancy (in which case the parties must follow the procedure provided for under sub-paragraph (4)).

• (3) Provision that, in the event that the landlord fails to give the tenant any notice under sub-paragraph (2) then the schedule of condition will be deemed to be final and binding for the purposes of the tenancy.

• (4) Provision that—

• (a) if the landlord gives the tenant notice in accordance with sub-paragraph (2)(b), the parties must in good faith seek to agree such reasonable variations to the schedule of condition as soon as reasonably practicable within 10 working days (failing which either the landlord or the tenant may instruct the Independent Surveyor to prepare the schedule of condition),

• (b) the schedule of condition prepared by an Independent Surveyor (including a decision as to the costs of the preparation) is final and binding for the purposes of this tenancy, and

• (c) for these purposes, “Independent Surveyor” means an independent surveyor agreed by the landlord and the tenant or (failing agreement) nominated at the request of either party by the president of the Royal Institution of Chartered Surveyors or any person authorised at the relevant time to act on his behalf (either of whose nomination will be binding).

• (5) An undertaking that the landlord and tenant will each provide reasonable assistance to the other to undertake and finalise the schedule of condition.

No implied rights

29

Provision that nothing in the tenancy impliedly grants to the tenant any rights other than those expressly granted by the tenancy.

Exclusion of warranty about use

30

Provision that nothing in the tenancy implies a warranty that the premises may be used for any purpose.

Notices

31

Provision that—

• (a) section 196 of the Law of Property Act 1925²⁵ applies to all notices and documents relating to the tenancy;

• (b) where the expression “tenant” includes more than one person, service on any one of them is to be treated as service on them all.

Third parties

32

Provision that the parties to the tenancy do not intend any term of the tenancy to be enforceable solely by virtue of the Contracts (Rights of Third Parties) Act 1999²⁶ by any person who is not a party.

Section 207 of the Act

33

Where the local authority is granting the tenancy in the exercise of its powers under section 207 of the Act, provision that—

• (a) the local authority has entered into the tenancy pursuant to its power set out in section 207(2) of the Act;

• (b) pursuant to section 207(3) of the Act, the parties acknowledge and agree that the tenancy has effect as if it was entered into by the landlord instead of the local authority;

• (c) the local authority is acting under section 204(4) of the Act in its own name but is acting so as to bind the landlord rather than itself;

• (d) notwithstanding any other provisions in the tenancy, the local authority has no liability whatsoever arising out of or in connection with the tenancy or in respect of the performance of the obligations on the part of the landlord contained in the tenancy and the tenant acknowledges that no claims can be made against the local authority for any failures on the part of the landlord.

Signed

Signed by authority of the Secretary of State for Housing, Communities and Local Government

Alex Norris — Parliamentary Under Secretary of State — Department for Housing, Communities and Local Government — 7th November 2024

Explanatory note

(This note is not part of the Regulations)

EXPLANATORY NOTE

These Regulations are made under the Town and Country Planning Act 1990 (c. 8) and the Levelling-up and Regeneration Act 2023 (c. 55) (“the 2023 Act”). They set out the process to be followed when a local authority exercises the powers given to it in Part 10 of the 2023 Act to arrange for a rental auction to be carried out in respect of qualifying high-street premises. They also amend the Town and Country Planning (General Permitted Development) (England) Order 2015 (S.I. 2015/596) (“the General Permitted Development Order”) to provide for temporary planning permission for a change of use of such premises to a suitable high-street use for the duration of a tenancy granted following a rental auction held under Part 10 of the 2023 Act.

Part 2 of the Regulations make provision for rental auctions. Regulation 3 requires local authorities to consult on any proposal to designate a high street or a town centre for the purposes of section 191 of the 2023 Act, or to vary or withdraw an existing designation. Regulation 4 of, and Schedule 1 to, the Regulations set out the forms to be used for initial letting notices, final letting notices and counter-notices served under sections 195, 198 and 201 respectively of the 2023 Act.

Regulation 5 requires the local authority to carry out a survey of premises before arranging a rental auction in relation to those premises. Regulations 6 to 10 and Schedules 2 and 3 to the Regulations set out the steps which must be taken by the local authority and by the landlord of the premises concerned in weeks one to ten of the auction period, and provide for the terms of the tenancy contract (Schedule 2) and the tenancy (Schedule 3). Regulation 11 provides for who the local authority may accept as the successful bidder, but also gives the local authority power to decide not to accept any bid. Regulation 12 determines when the rental auction is concluded, and regulation 13 makes provision for payment of the costs of the auction process. Regulation 14 provides for the service of any documents required as part of the auction process.

Part 3 of the Regulations amends Part 4 of Schedule 2 to the General Permitted Development Order to provide for planning permission for a temporary change of use in consequence of the grant of a tenancy following a rental auction held under Part 10 of the 2023 Act.

A full impact assessment has not been produced for this instrument, as no, or no significant, impact on the private, voluntary or public sector is foreseen.

Footnotes