50% ETHICAL EMPTY RATES REDUCTION WITH CHARITIES
The idea is simple. By occupying otherwise empty commercial premises, a charity can reduce your rates burden by qualifying for, and paying, 20% of the normal empty business rates charge. This is a special rate only available to genuine charities and social causes using your space. In addition to providing the space rent-free, the original ratepayer makes a charitable contribution equivalent to 50% of the empty rates that the charity has saved them. This way the ratepayer still saves a net 50% during the swift-to-implement, no-notice tenancy and the charity uses your contribution to pay its 20% rates liability and fund its initiative. They commit to being able to dismantle the operation within days, should a new tenant be found, or if the space is needed back for any reason.
As well as being able to save you money quickly by taking units at short notice, the landlord & their agents also benefit from the busy look and feel of the space and the kudos of doing something charitable with otherwise unused space. Finally, our landlords and agents have reported that the burden of insurance and repair costs is lower whilst their premises are in regular use.
Break-even period and Duration of tenancy
The donations are payable in monthly instalments and you can terminate the tenancy anytime, penalty-free. Your net saving equates to 50% over a year and the break-even duration for you is very short (34 days). This means that even if you had a letting offer, you are likely to have made your money back in less time than it typically takes to sign the legals if the deal does actually complete.
On occasion, charities are able to source funds elsewhere (eg local grants) for their proposed initiative of your space. In exchange for some security of tenure (typically 12-24 months), this will translate into a further cost reduction (or perhaps even making the site cost neutral) for the landlord.
Empty Rates mitigation – What ethical options you have
The ASTOP agency’s principal and its associates have, over the last 5 years, sourced space for charities including MIND, Age UK, Rotary Club, Lions Club, Housing Associations and Furniture charities, Freecycle, Healthy Planet and dozens of smaller charities and social enterprises. Although marginally higher cost than the highly bureaucratic “in and out” rates mitigation option, which councils generally frown upon, the charity-landlord partnership is widely accepted as the most ethical rates reduction solution, by local and national government.
The use of retail, warehouse & office space have been accepted by over 100 local authorities & commended by MPs on both sides of the political spectrum. Click to watch 3 video examples – here.
Current and past clients of ASTOP and its associates, who have supported the charitable and social sectors in this way, include AXA, Land Securities, Savills, CBRE, Barclays and William Peers Group.
To discuss your needs and to identify the initiatives and uses most suitable to your space, please contact the Principal of ASTOP, Shaylesh Patel. Shaylesh Patel is the founder and award winner of this working practice created whilst working within the charity he founded, Healthy Planet until 2014. He is at the heart of the extensive ASTOP network dedicated to helping landlords support charities of all backgrounds.