2014 will see some changes to commercial property law that will have a significant impact. For everyone involved in this sector, knowing what is coming is essential.
The changes involve an easing of restrictions under permitted development rights, and a change to the arrangements concerning the recovery of commercial rent arrears.
On the first point, it has been decided that something needs to be done to ease the blight of boarded up, empty retail units in town centres. Many of these units have become empty because independent businesses have been unable to pay their increasingly high rents due to the economic climate.
From April 2014, full planning permission will not be required for the conversion of retail units and premises used for financial and professional services into residential properties.
The unit will be able to become a single dwelling or a maximum of 4 flats, and the work needed to undertake the conversion will not require planning permission, although prior approval for the change of use will still need to be sought, as the effect of the loss of retail and the way in which such redevelopment might change the character of an area have to be considered.
On the second point, April 2014 will also herald a new process to help commercial landlords recover rent arrears, a change which will also affect any businesses in difficulties with their rent. The new system, Commercial Rent Arrears Recovery (CRAR) will replace the Distress for Rent (Amendment) Rules which came into force in 2009.
The changes will only apply to non-residential property and will allow landlords to recover unpaid rent, as well as VAT and interest. Under the current rules, a landlord can send a bailiff to take goods from the tenant up to the value of the rent owed, thus avoiding the need for court proceedings, but under the CRAR scheme, the landlord will not be allowed to do that until they have served the tenant with a “notice of enforcement.” In response to concerns expressed by landlords that a 14 day time period would make it easier for tenants in debt to remove goods and/or abscond, the time period will be 7 days. The arrears must be equal to, or greater than 7 days-worth before the landlord will be allowed to use CRAR, and this will unfold alongside new rules designed to stop aggressive enforcement by bailiffs and debt companies.
Bio: Cliff Ceeton works on behalf of Move Revolution (Hayward’s Heath) next generation estate agents who perform all legal actions of a traditional estate agent at the fraction of a price. Cliff specialises in dealing with accounts and legal investment contracts for property. He is always on the lookout for changes in property law and loves to documents them for others to see.
