David Prosser: Ageing laws holding back the high street
Thursday 17 March 2011
Outlook One of the micro-measures the Chancellor should explore next week is a review of the aged laws that govern the relationship between the owners of commercial properties and tenants such as retailers. As Stephen Marks, the boss of French Connection noted yesterday, these laws are now creaking badly – so much so that they are a serious impediment to a recovery on the high street.
These laws were developed with good intentions and create difficulties for both landlords and tenants. But with so many retail premises now standing empty, they need overhauling.
Here's just one example. In certain circumstances, the leasehold laws give tenants the right to demand an independent review of the rents they are being asked to pay. And if they can show that a near neighbour is paying substantially less for a similar property, they may entitled to a reduction.
You can see the arguments for such a system, but the effect, in practice, is that landlords opt to keep empty shops empty rather than rent them out to tenants who can't pay top dollar – otherwise they risk other tenants demanding to pay less too.
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