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

SCHEDULE 2 Tenancy contract

Regulation 7(4) Introductory provisions 1 (1) The parties to the agreement— (a) the names and addresses of the landlord, and the local authority, including a statement that the local authority is acting so as to bind the landlord and not itself, pursuant to section 204(5) of the Levelling Up and Regeneration Act 2023 (“the Act”); (b) the name and address of the tenant, which should be verified and completed once the auction has been completed and a successful bidder has been identified. (2) A description of the premises, in the same terms as, or cross referring to, the description in the proposed tenancy. (3) Statements (a) and (b), and where the Landlord is undertaking works to the premises, statement (c), in relation to the background to the contract, as follows— (a) the landlord has an interest in the premises at [insert address] and has agreed to grant the tenant a tenancy of the premises on the terms contained in this agreement; (b) the tenancy is to be granted further to a contract entered into under section 204 of the Act (“a tenancy contract”) and is excluded from sections 24 to 28 of the Landlord and Tenant Act 1954 pursuant to section 209 of the Act; (c) the landlord has agreed to undertake certain works at the premises before the grant of the tenancy. . (4) Interpretative provisions, including— (a) the following definitions— “landlord’s works” means the works to be carried out by the landlord at the premises, which may be inside or outside the premises, to raise the premises to the Minimum Standard as annexed to the tenancy contract, where the premises do not already satisfy that Standard; ; “landlord’s works completion date” means the date on which the landlord’s works are completed, as notified to the tenant by the landlord under the tenancy contract; ; “Minimum Standard” means a condition which is safe, secure and with any significant occupational risks removed or managed by which it is meant— there can be no significant water ingress or leaking pipework, no unstable or loose elements which may fall and cause harm; all internal doors, and external doors (used to access the premises), are capable of operation for safe ingress or egress; all external windows are capable of operation (where so designed) for ventilation or escape in an emergency; the interior of the premises will be clear from debris, vermin, significant deviations from plane; all fire safety requirements for a vacant building must be in place, with fire and smoke detection operating and certified, and fire doors and compartmentations in a condition supported by a fire risk assessment; mains water and electrical supplies, should be connected, certified as safe, or capable of re-connection without significant expense to the tenant; gas if present should be connected, certified as safe, or capable of re-connection without significant expense to the tenant; toilet and hand washing facilities should be provided and be operational and capable of free-flowing discharge to a mains drainage connection; any shop fronts forming part of the premises should be provided with glazing, frames and entrance doors which are intact, sound, and operational; there should be no fungal decay, or mould growth which presents a risk to, respiratory health, or the structural integrity of the premises; ; “Part 1 Conditions” means Part 1 of the Standard Commercial Property Conditions (Third Edition - 2018 Revision) ; “rent commencement date” means the date that is the last day of a period of four weeks starting with the day after the tenancy completion date; ; “requisite consents” means building regulation approvals, byelaw approvals, and any other consents, licences and authorisations required from any competent authority, statutory undertaker or person for the carrying out of works by the landlord or, as the case may be, by the tenant under the tenancy contract; ; “tenancy completion date” is— the tenth working day in the period starting with the day after the landlord’s works completion date, or any earlier date agreed between the landlord and the tenant; ; “tenant’s works” means the fitting out works to be carried out by the tenant for the use and enjoyment of the premises under the tenancy contract, whether inside or outside the premises; ; (b) details of the annual rent, to be completed after the choice of the successful bidder, under regulation 11; (c) provision that reference in the contract— (i) to a numbered condition is a reference to the condition with that number in Part 1 of the Standard Commercial Property Conditions (Third Edition – 2018 revision); (ii) to the landlord includes a reference to any representative of the landlord whose details have been given by notice from time to time by the landlord to the tenant; (iii) to the tenant includes a reference to any representative of the tenant whose details have been given by notice from time to time by the tenant to the landlord; (d) provision that the terms used in the tenancy contract are to have the same meaning when used in the Part 1 Conditions. Agreement for tenancy 2 (1) Provision that— (a) in consideration of and satisfaction of any obligations owed by either the landlord or the tenant under the tenancy contract, the landlord will grant to the tenant and the tenant will accept from the landlord the tenancy of the premises on the terms annexed to the tenancy contract (“the tenancy”), subject to the completion of the landlord’s works on the terms set out in the tenancy contract; (b) no purchase price, premium, or deposit is payable (except payment of any deposit specified in the tenancy). (2) The contract must also provide that— (a) the tenant cannot require the landlord to grant the tenancy of the premises to any person other than the tenant; (b) the tenant cannot assign, sublet, charge, or otherwise share or part with the benefit of the tenancy contract whether in relation to the whole or any part of the premises; (c) conditions 1.4, 3.2 and 9.8.3 do not apply to the tenancy contract. Timetable for engrossments 3 (1) A requirement for the landlord to send— (a) the engrossed counterpart tenancy to the tenant, by 5 working days after the landlord’s works completion date, and (b) the engrossed counterpart licence for alterations to the tenant by the later of— (i) if any landlord approval is required, 5 working days after the landlord has approved the plans and specifications for the tenant’s works in accordance with provision made under paragraph 9.1, and (ii) 5 working days after the landlord’s works completion date. (2) A requirement for the tenant to execute the counterpart licence for alterations and deliver it to the landlord on completion of the licence for alterations. (3) Provision disapplying condition 11.2.5 in relation to the tenancy contract. Exclusion of security of tenure 4 A statement that the parties acknowledge that the tenancy is granted further to a contract entered into under section 204 of the Act and is excluded from sections 24 to 28 of the Landlord and Tenant Act 1954 pursuant to section 209 of the Act. Landlord’s works 5 (1) A requirement for the landlord to apply for and use all reasonable endeavours to obtain any requisite consents in respect of the landlord’s works. (2) A requirement for the landlord to use all reasonable endeavours to procure that the landlord’s works are completed by the end of a period of three calendar months starting with the date on which the tenancy contract is completed. (3) Provision for that period to be extended by such period as is determined by a professionally qualified surveyor appointed by the landlord, acting reasonably, having regard to the nature and severity of any event of disruption or delay, where completion of the landlord’s works is delayed due to an event or cause that is beyond the landlord’s reasonable control and the landlord is able to provide justifiable evidence of such delay to the tenant. (4) A requirement for the landlord to use all reasonable endeavours to procure that the landlord’s works are carried out— (a) with due diligence and in a good and competent manner, (b) using only good quality materials and well-maintained plant and equipment, (c) in accordance with the tenancy contract and the requisite consents in respect of the landlord’s works, (d) in accordance with all statutory or other legal requirements and the recommendations or requirements of the local authority or statutory undertakings, (e) in compliance with all relevant British Standards, codes of practices and good building practice, and (f) by selecting and using materials so as to avoid known hazards to the health and safety of any person and to ensure the long-term integrity of the premises. (5) A requirement for the landlord to serve written notice on the tenant and on the local authority as soon as the landlord’s works are complete, stating in that notice the date which is the landlord’s works completion date. Tenant further remedies 6 (1) A requirement, where— (a) the landlord’s completion date is later than the end of the three-month period referred to in paragraph 5(2) (the “target period”), (b) that period is not extended under paragraph 5(3), and (c) the landlord has failed to use all reasonable endeavours to procure that the landlord’s works are completed, for the landlord to pay any liquidated damages payable to the tenant under the tenancy contract within 5 working days of the landlord’s works completion date. (2) Provision for the rate of liquidated damages payable by the landlord to the tenant under sub-paragraph (1) to be £55 for each day or part of a day the landlord’s works continue after the end of the target period. Step-in provision (3) The tenancy contract may include provision— (a) allowing the tenant to serve notice on the landlord, where the landlord’s works are not completed within the target period, and that period has not been extended under paragraph 5(3), stating the tenant’s intention to complete the landlord’s works at the tenant’s own cost; (b) where the landlord receives a notice from the tenant under paragraph (a)— (i) that the landlord may not undertake any further elements of the landlord’s works, (ii) the tenant will have the right to undertake the remainder of the landlord’s works and the landlord will provide such reasonable access as is necessary to enable the tenant to do so, and (iii) that the tenant will be permitted to deduct the proper costs of undertaking the remainder of the landlord’s works from the rent payable under the tenancy commencing on the rent commencement date (and no deposit is payable under the tenancy until such time as the tenant is reimbursed); (c) if the tenant exercises its right to serve notice under paragraph (a) to undertake the remainder of the landlord’s works, the tenant must (subject to access being provided by the landlord) undertake the works with all due diligence and as soon as reasonably practicable and serve written notice on the landlord as soon as the landlord’s works are complete and the date stated in that notice is to be treated as the landlord’s works completion date. Long stop date 7 (1) Provision that, if the landlord’s works completion date has not occurred by 16:00 on the last day of a period of six months starting on the date of the tenancy contract (“the long stop date”), and the tenant has not exercised rights provided for under paragraph 6(3), the tenant may— (a) at any time after the long stop date (but before the landlord’s works completion date) give written notice to the landlord that, unless the landlord’s works completion date occurs within 20 working days of the receipt of that notice (time being of the essence), the tenant may terminate the tenancy contract; (b) if the landlord’s works completion date does not occur within 20 working days of receipt of the notice given by the tenant under paragraph (a), then the tenant may, by further written notice, terminate the tenancy contract with immediate effect and the landlord will be liable to the tenant for the proper costs incurred by the tenant arising out of the auction, and the proposed letting of the premises. (2) Provision disapplying conditions 8.1, 8.2.3, 8.2.4(b), 8.2.5 and 8.2.7 in relation to the tenancy contract. Conditions 8 (1) Provision incorporating the Part 1 Conditions in the tenancy contract in accordance with this paragraph, so far as they— (a) are applicable to the grant of a tenancy, (b) are not inconsistent with the other clauses in the tenancy contract, and (c) have not been modified or excluded by any of the other clauses in the tenancy contract. (2) Provision applying the Part 1 Conditions subject to the following modifications— (a) the reference to completion date in condition 1.1.1(d) is to be read as if it were a reference to the tenancy completion date as defined in the tenancy contract; (b) the reference to contract rate in condition 1.1.1(e) is to be read as if it were a reference to the rate provided for under paragraph 15(5)(b); (c) condition 1.1.4 is to be read as if condition 1.1.4(a) were omitted; (d) reference to VAT in condition 1.1.1(o) is to be read as if it were a reference to value added tax or any equivalent tax chargeable in the United Kingdom; (e) condition 9.1.1 is to be read as if the words “completion date is twenty working days after the date of completion but” were omitted; (f) condition 11.2.2 is to be read as if the words: “(d) “transfer” includes the grant of a tenancy” were included. Tenant’s works 9 (1) Provision that, except to the extent that the tenant’s works (or any part thereof) do not require landlord consent or approval under the tenancy or as provided for under sub-paragraph (3), and subject to any provision made under paragraph 10(5) of Schedule 3, the tenant may after the date of the tenancy contract at the tenant’s expense prepare and submit to the landlord for approval (such approval not to be unreasonably withheld or delayed), plans and specifications of the tenant’s works in such detail as the landlord may reasonably require. (2) Provision that— (a) provided the requirements in sub-paragraph (1) are satisfied, the tenant’s works may include— (i) works which are inside or outside the premises, and (ii) the removal of any fit out in the premises which exists at the date of the tenancy contract (“existing fit out”) and which will require the removal of any structural item; (b) in considering a request by the tenant for consent for the removal of existing fit out, the landlord must have due regard to any reasonable opinion of the tenant that it cannot be made use of by the tenant for its proposed use of the premises, if that opinion is communicated to the landlord by the tenant. (3) Provision that the tenant does not require the consent or approval of the landlord to remove any existing fit out in the premises where— (a) that removal will not require the removal of any structural item from the premises, and (b) the fit out cannot, in the reasonable opinion of the tenant, be made use of by the tenant for its proposed use of the premises. (4) A requirement that completion of the licence for alterations take place on the later of— (a) completion of the tenancy, and (b) 10 working days after the date the landlord consents to or approves the tenant’s works in accordance with sub-paragraph (1), where any such consent or approval is required. (5) A requirement, which may be included in the licence for alterations, for— (a) any tenant’s works to be carried out in accordance with any requisite consents; (b) any tenant’s works to be removed and any damage made good at the end of the tenancy subject to any alternative direction made by the landlord and communicated to the tenant at least three months prior to the expiry of the tenancy, provided that the tenant may not be required to reinstate any existing fit out which was removed by the tenant in compliance with sub-paragraphs (1) to (3). Deducing title 10 (1) A statement that— (a) the landlord’s title, which must be identified as a freehold or leasehold title, has been deduced to the tenant before the date of the tenancy contract, and (b) the tenant is deemed to have full knowledge of the landlord’s title and is not entitled to raise any objection, enquiry or requisition in relation to the landlord’s title. (2) Provision disapplying conditions 7.1, 7.2, 7.3, 7.4.2, 11.2.4, and 11.3 in relation to the tenancy contract. Title guarantee 11 (1) Provision stating whether the landlord grants the tenancy with a full title guarantee, a limited title guarantee or no title guarantee. (2) The tenancy must be granted with a full title guarantee, unless it appears to the local authority, having considered any representations made by the landlord under regulation 8, that there is good reason to permit the landlord to grant the tenancy with— (a) a limited title guarantee, or (b) no title guarantee. (3) Where the tenancy is to be granted with a full title guarantee or a limited title guarantee, provision that— (a) the implied covenants for title are modified so that— (i) the covenant set out in section 2(1)(b) of the Law of Property (Miscellaneous Provisions) Act 1994 does not extend to costs arising from the tenant’s failure to make proper searches or raise requisitions on title or on the results of the tenant’s searches, and (ii) in the case of a limited title guarantee, the covenant set out in section 3(3) of the Law of Property (Miscellaneous Provisions) Act 1994 extends only to charges or encumbrances created by the landlord, and (b) conditions 7.6.2, 7.6.4 and 12 do not apply to the tenancy contract. (4) Where the tenancy is to be granted with no title guarantee, provision that— (a) the landlord grants the tenancy with no title guarantee and with no covenants for title, whether express or implied; (b) conditions 7.6.2, 7.6.4 and 12 do not apply to the tenancy contract. Matters affecting the Premises 12 (1) A requirement for the landlord to grant the tenancy to the tenant free from encumbrances other than— (a) any matters, other than financial charges, contained or referred to in the entries or records made in— (i) registers maintained by HM Land Registry, as at [DATE AND TIME OF OFFICIAL COPIES] under title number [NUMBER], and (ii) the Land Charges Department of HM Land Registry, as at [DATE OF SEARCH]; (b) all matters contained or referred to in the tenancy; (c) any matters discoverable by inspection of the premises before the date of this agreement; (d) any matters which the landlord does not and could not reasonably know about; (e) any matters, other than financial charges, disclosed or which would have been disclosed by the searches and enquiries that the tenant made, or a prudent tenant would have made, before entering into this agreement; (f) public requirements; (g) any matters which are, or (where the tenancy will not be registered) would be, unregistered interests which override first registration under section 12(4)(c) of and Schedule 1 to the Land Registration Act 2002. (2) A statement that the tenant is deemed to have full knowledge of the matters referred to in sub-paragraph (1) and will not raise any enquiry, objection, requisition or claim in respect of any of them. (3) Provision— (a) disapplying conditions 4.1.1, 4.1.2, 4.1.3 and 4.2.1 in relation to the tenancy contract; (b) applying condition 7.6.3 subject to the modification that the reference in that condition to condition 4.1.2 is to be read as a reference to the provision referred to in sub-paragraph (1). Termination on tenant’s insolvency or material non-compliance by the tenant 13 (1) Provision identifying events of default for the purposes of the tenancy contract, which may include all or any of the following events— (a) the taking of any step-in connection with any voluntary arrangement or any other compromise or arrangement for the benefit of any creditors of the tenant; (b) the making of an application for an administration order or the making of an administration order in relation to the tenant; (c) the giving of any notice of intention to appoint an administrator, or the filing at court of the prescribed documents in connection with the appointment of an administrator, or the appointment of an administrator, in relation to the tenant; (d) the appointment of a receiver or manager or an administrative receiver in relation to any property or income of the tenant; (e) the commencement of a voluntary winding-up in respect of the tenant, except a winding-up for the purpose of amalgamation or reconstruction of a solvent company in respect of which a statutory declaration of solvency has been filed with the Registrar of Companies; (f) the making of a petition for a winding-up order or a winding-up order in respect of the tenant; (g) the striking-off of the tenant from the Register of Companies or the making of an application for the tenant to be struck-off; (h) the tenant otherwise ceasing to exist; (i) the making of an application to court for, or obtaining, a moratorium under Part A1 of the Insolvency Act 1986 in relation to the tenant; (j) where the tenant is an individual and not a body corporate, the making of an application for a bankruptcy order or the making of a bankruptcy order against the tenant; (k) the levying of any execution or other such process on or against, or taking control or possession of, the whole or any part of the tenant’s assets. (2) Provision that if an event of default occurs, the landlord may, at any time prior to grant of the tenancy, terminate the tenancy contract by giving written notice to the tenant. (3) Provision that, if at any time there is any material non-compliance by the tenant with any of its obligations under the tenancy contract and such default is either— (a) not capable of being remedied, or (b) is capable of remedy but the tenant has not remedied the default within 14 working days (or such longer period as may be reasonable in the circumstances) after service on the tenant by the landlord of a notice specifying the default, the landlord may, at any time prior to grant of the tenancy, terminate the tenancy contract by giving written notice to the tenant. Consequences of termination 14 (1) Provision that if the tenancy contract is terminated as provided for under paragraph 7(1)(b), 13(2) or 13(3) or sub-paragraph (2)(a) or (b), or in accordance with condition 10.1(b)— (a) the tenancy contract is terminated with immediate effect from the date of the notice to terminate and none of the parties has any further rights or obligations under the tenancy contract except for— (i) the rights of any party in respect of any earlier breach of the tenancy contract, and (ii) the obligations in this paragraph and paragraph 16(c) which continue in force notwithstanding the termination of the tenancy contract, and (b) the tenant must immediately return any documents it received from the landlord. (2) Provision that— (a) if the tenant fails to complete in accordance with a notice to complete, the landlord may rescind the contract, (b) if the landlord fails to complete in accordance with a notice to complete, the tenant may rescind the contract, (c) if either party rescinds the contract, the provision made under this paragraph is to apply, and (d) conditions 10.2, 10.5, and 10.6 do not apply in relation to the tenancy contract. Completion of the grant of the tenancy 15 (1) A requirement for completion of the grant of the tenancy to take place on the tenancy completion date. (2) Provision that condition 9.2.1 does not apply to this agreement. (3) Provision for the grant of the tenancy to be on the following terms— (a) the contractual term of the tenancy is to commence on the date of completion of the tenancy; (b) the sum to be inserted as the “rent” in the tenancy is to be £[figure determined by the auction process] per annum exclusive of VAT and the tenant’s liability to pay that sum commences on the rent commencement date; (c) the tenant’s liability to pay the other sums payable under the tenancy commences on the tenancy completion date. (4) A requirement that, on completion, the tenant is to pay the deposit to the account nominated by the landlord. (5) Provision that— (a) if completion is delayed due to the tenant’s default or the tenant fails to pay any sum due under this agreement in full on completion, the tenant must pay interest in addition to damages for losses incurred by the landlord as a result of the delayed completion; (b) the interest is payable at the rate of 2% per annum above the base rate from time to time of such UK clearing bank as the landlord may choose on any unpaid amount for the period from the tenancy completion date to the date of actual payment. (6) Provision that— (a) the tenant is to pay the money due on completion by electronic means in same day cleared funds from an account held in the name of the tenant (or a conveyancer acting for the tenant whose details have been notified to the landlord), at a UK clearing bank to an account in the name of the landlord (or a conveyancer acting for the landlord whose details have been notified to the tenant); (b) conditions 9.7 and 10.3 do not apply to this agreement. Registration 16 Provision that— (a) the tenant may note this agreement by way of a unilateral notice (where the landlord’s title is registered) or C(iv) Land Charge (where the landlord’s title is unregistered) against the landlord’s title or the landlord’s name, as applicable; (b) the tenant is not permitted to— (i) note this agreement against the landlord’s title at HM Land Registry by way of an agreed notice, or (ii) send this agreement or a copy of it to HM Land Registry; (c) on the earlier of the completion of the tenancy or termination of this agreement, the tenant must— (i) immediately cancel all entries relating to this agreement registered against the landlord’s title or landlord’s name, as applicable, and (ii) promptly notify the landlord when such application has been completed. Value Added Tax 17 Provision that— (a) each amount stated to be payable under or pursuant to this agreement is exclusive of VAT (if any); (b) if any VAT is chargeable on any supply made by one party to the other party under or pursuant to this agreement, the paying party must pay to the other party an amount equal to that VAT; (c) condition 2 does not apply to this agreement. Entire agreement 18 (1) Provision that the tenancy contract and the documents annexed to it constitute the whole agreement between the parties and supersede all previous discussions, correspondence, negotiations, arrangements, understandings and agreements between them relating to their subject matter. (2) A statement that the tenant acknowledges that— (a) in entering into the tenancy contract and the documents annexed to it the tenant does not rely on, and has no remedies in respect of, any representation or warranty (whether made innocently or negligently) other than those— (i) set out in the tenancy contract or the documents annexed to it, or (ii) contained in any written replies, and (b) no representation or warranty is given or is to be implied by— (i) the landlord entering into this agreement, or (ii) any step taken by or on behalf of the landlord in connection with this agreement, as to the suitability of the premises or the building of which it forms part (if applicable) for the tenant’s works. (3) A statement that nothing in the provision made under this paragraph limits or excludes any liability for fraud. (4) Condition 10.1 applies as if for “the negotiations leading to it” there were substituted “written replies”. (5) For the purposes of any provision made under this paragraph, “written replies” means any written replies that the landlord has given prior to exchange of the tenancy contract to any written enquiries raised by the local authority. Joint and several liability 19 Provision that— (a) where a party to the tenancy contract comprises more than one person, those persons are to be jointly and severally liable for the obligations and liabilities of that party arising under the tenancy contract; (b) the party to whom those obligations and liabilities are owed may take action against, or release or compromise the liability of, or grant time or other indulgence to, any one of those persons without affecting the liability of any other of them; (c) condition 1.2 is not to apply in relation to the tenancy contract. Notices 20 (1) Provision that any notice or other communication given under the tenancy contract must be— (a) in writing, and (b) delivered by hand or sent by pre-paid first-class post or other next working day delivery service to the relevant party as follows— (i) to the landlord, at [the landlord’s address] and marked for the attention of [name of the person concerned], and (ii) to the tenant at [the tenant’s address] and marked for the attention of [name of the person concerned], or as otherwise specified by the relevant party by notice in writing to the other party. (2) Provision that— (a) any notice or other communication given in accordance with provision made under sub-paragraph (1) will be deemed to have been received— (i) if delivered by hand, on signature of a delivery receipt or at the time the notice or other communication is left at the proper address, or (ii) if sent by pre-paid first-class post or other next working day delivery service, at 9.00 am on the second working day after posting; (b) a notice or other communication given under the tenancy contract is not validly given if sent by e-mail; (c) provision made under this paragraph does not apply to the service of any proceedings or other documents in any legal action or, where applicable, any arbitration or other method of dispute resolution. Schedule of works 21 A schedule of the landlord’s works, drawn up by a surveyor instructed by the local authority under regulation 5. Section 204 of the Act 22 Where the local authority is granting the tenancy contract in the exercise of its powers under section 204 of the Act, provision that, notwithstanding any other provisions in the tenancy contract, the local authority has no liability whatsoever arising out of or in connection with the tenancy contract or in respect of the performance of the obligations on the part of the landlord contained in the tenancy contract and the tenant acknowledges that no claims can be made against the local authority for any failures on the part of the landlord.