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Time to market early for the Christmas trade; RICHARD FREEMAN-WALLACE.

THE current economic climate may discourage us from thinking about Christmas for another two months or so, but now is the time to start marketing your empty shop for a temporary let over the Christmas period.

Those who want to sell seasonal merchandise will be casting their eye over the property market for the best locations. Now, more than ever before, they will have the widest of choices.

The ability to sublet has been made much easier in recent years. First, in 2004, the Government overhauled the procedures on the grant of leases and tenancies of commercial premises, where the tenant's security of tenure and right to claim a new lease at the end of the current tenancy, is to be excluded.

Now, rather than applying for a court order, all that is required is the service of a notice and the signing or swearing of a declaration by the tenant. Notices can be served as short as the day before the keys are handed over to the short-term tenant.

Secondly, in 2005 many of the largest UK commercial property owners agreed to support a declaration by the British Property Federation (BPF) to ease sub-letting restrictions.

This allows tenants to sublet at "market rent" - even where the relevant lease states that subletting must be at the higher of either the market rent or the then passing rent.

The strict lease provisions protect property values for landlords but are extremely unpopular with tenants, who have criticised it for limiting their ability to respond to changing circumstances and market conditions.

If a tenant decides to leave the premises and cut his losses by subletting, it can be particularly hard to abide by the landlord's lease provisions.

As a result numerous buildings, shops and offices were left vacant for years after the tenant has moved out.

The ability to sublet at current market rents, irrespective of the level of rent currently payable to the landlord, is extremely advantageous to a tenant with excess space.

Rents generally have fallen over the past five years when they might have been last reviewed or the lease granted.

So being able to sublet at a rent set five or so years ago will not help the tenant.

Flexible leases are not just for Christmas, but those who are looking for the best space will be looking now.

Richard Freeman-Wallace is a partner in the commercial property department at Hay & Kilner
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Title Annotation:Features
Publication:The Journal (Newcastle, England)
Date:Sep 25, 2013
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