Commercial Property Tenant Law

Commercial Property Tenant Law

Introduction

After the combined efforts of public policies and new financial instruments resulted in putting United Kingdom back on the map of real estate business, it was only a matter of time until gentrification followed. Since the early 2000s, most newspaper reports on United Kingdom have headlines like 'rebirth', 'recovery', 'boom' or even 'gold rush', with both rental and real estate prices shooting through the roof until the breakout of the financial crisis in late 2008 (Roger, 2010).

Summarising the relation of public policies to gentrification in United Kingdom, a fundamental change can be observed. Whereas until the late 1960s racial discrimination led to the decline and abandonment of United Kingdom, the growing influence of African-American voters and organisations has managed to push a policy that effectively funnelled public resources back into United Kingdom. This has opened the doors for 'real' market interests that are now catalysed through the abandonment of existing zoning laws and rezoning schemes that allow for higher density. From the opening of the rent gap, through the fixing of the market to its closing, none of the central elements of United Kingdom's revitalisation took place without key state intervention (Abbott et al, 2007).

Besides these rather particular physical conditions, the political prerequisites for the urban renewal yet to come were also extraordinary. First, and different from many of its fellow West German states, West Berlin developed a model of a socially balanced careful urban renewal which became the official urban policy of its municipal government during the 1980s. This model responded to a powerful local squatter movement and was based on a blend of Keynesian welfare politics mixed with a post-modern appreciation of culture and authenticity. It aimed at reconciling physical renewal with a socially balanced development, promising, among other goals, a preservation of the existing social structures against the displacement due to rent increases that resulted from refurbishment (Stone & Cunningham, 2012). The “careful urban renewal” was almost entirely based on public subsidies. In fact, in the urban renewal areas of the 1980s, close to 100 per cent of the refurbishment was publicly funded. An important side effect of this support were extensive rental and occupational obligations that had to be accepted by those who received the subsidies. These obligations bound rent prices to very affordable levels for up to 20 years (Smith & Keenan, 2004).

This restitution had two important consequences. First, property rights as opposed to right of usage were instituted as the main determinant for urban development. Secondly, once the original owners were given back their property, between 70 and 90 per cent of them immediately sold on to professional housing companies and developers. Thus, restitution did not only lead to a professionalisation and commercialisation of ownership structures, but also fuelled a speculative bubble that exerted a high pressure on existing rental and sales prices (Poole, 2012).

Rolling Out the Market, Weakening Public Control

This changed considerably in the second half of the 1990s. Between 1996 and 1999, following a municipal budget ...