Coronavirus (COVID-19) and the reopening of the high street: from new fashion to New England IPA
Adam Riley, 5th June, 2020
With plans to lift the restrictions which have forced the closure of many non-essential commercial enterprises now in place, and people looking to continental Europe who are now weeks into their programmes of reopening, the time has come for solid planning and preparations to be at the forefront of people’s minds.
A part of this process, for many business owners and operators, will be to start looking at how they can make their operations; and in many cases their physical premises; fit and proper for the public to begin visiting once again. This will be the case whether you are in the group of business who have received the good news that they will be permitted to re-open during June; or one of those businesses eagerly awaiting news as to when you too will be able to reopen. The real key here is that without customer confidence in your business, and the measures you can (and do) put in place, simply opening again may often not be enough.
As discussed in ‘Commercial Leases and the impact of the coronavirus (COVID-19)’ rent will be a major issue for many business operators, and this is explored in detail within that blog.
While rent is a huge issue, and one which is dominating many of the headlines and themes of articles and stories throughout the business world at the moment, is cannot be assumed that dealing with this matter will be the resolution to any and all of a tenant’s issues. Another crucial issue, which must be addressed by anyone operating their business out of premises which are the subject of a lease, will be whether the measures which you want to put in place, and any measures which change how you are operating your business, are permitted under your lease.
The contents of leases can vary for many reasons, be that the preferences of a specific landlord; the issues which are of particular importance (for financial or strategic reasons) to a certain landlord; or simply the location of the premises themselves (units within shopping centres and similar developments will often have leases which are substantially similar to ensure a clear position for a landlord with regards to management, etc).
For all premises which are going to have numerous customers and staff present on site at any one time, a Health & Safety Risk Assessment is an absolute must. This will help you identify any ‘weak’ areas in your premises, and any measures which can be put in place to maximise customer and staff safety. For any queries or concerns you may have with regards to the health and safety planning, or any staff issues, our dedicated Employment Law team is always on hand to assist.
Once you have identified what you want and need to do to make your reopening a success, you need to thoroughly check your lease. Common clauses which may create issues are clauses restricting alterations; clauses restricting the affixing of any signage (or similar) to the premises; clauses relating to the hours during which you can (or in some cases must) operate when open. Tenants must be sure, before time and money is expended, that what they are doing is permitted or if their landlord’s consent to any of their actions needs to be obtained.
Is the use which you are proposing permitted by your lease? While many business owners will recognise the need or potential benefit to tweaking their business model (or the service they provide) there are some essential legal questions to ask. Are you permitted to use the property for the purpose you are proposing (for example, if you intend to operate a ‘take-away’ service, will this be permitted under the terms of your lease)? Once you have established whether your use is permitted under your lease, or whether your landlord’s consent may be required for a change/tweak in the use of the property, you will need to ensure that the additional or alternative services you are to offer do not require any additional licences. These can range from a pavement licence, enabling you to offer external seating on an outside area (usually a part of the public highway/pavement); to an off-licence under the Licensing Act 2003, which enables you to sell alcoholic products for consumption off of the property. Did you know for example that the sale of hot food and drink for consumption on or off of the property between the hours of 11pm and 5am is a licensable activity? If you are concerned, or even if you need to be sure that these issues may not impact you, our experienced and industry leading Licensing team is here to help.
In addition to the above, which are all directly linked to a tenant placing themselves in a position to reopen following lockdown, there are secondary issues which it is easy to lose sight of with the pressures and challenges facing business owners.
Tenants must remember that they will have repairing and dilapidations obligations. This is important as, during any periods of closure or non-use, properties will often deteriorate at a much-accelerated rate. In addition to this, tenants must be sure that they have all statutory compliance documentation which is required to safely operate the site and in order for them to allow public access. Such certificates are often obtained annually and therefore, with everything which has been going on, it is easy for these matters to ‘slip through the net’.
Finally, and as may always be the case in business, you may have one (or more) eye on making your exit from the business by way of assignment of your lease (either with or without the benefit of the business you have been operating). It is always important to remember, with any leased property, that there will be restrictions and requirements which will need to be met before the landlord may provide their consent to your proposed assignment. Ensuring that there are no breaches of the lease which have arisen either by virtue of any period of enforced closure, or due to any amended offering or use, are important in ensuring that when your application for consent to assign is made, you are in the best possible position to progress that transaction quickly and efficiently. If your sale includes the sale of your business, it’s goodwill, and any contracts, etc then our Corporate and Commercial team is at the end of the phone to ensure that you (and your interests) are looked after as best as possible.
At Gosschalks we have a wealth of knowledge and experience in dealing with all manner of commercial property, for a myriad of clients, and our multi-disciplinary nature makes us the ideal choice to ensure that no stone is left unturned.
Why not give us a call to help ensure that you position your business for a successful and sustainable reopening.
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If you're interested in speaking to us to establish how we may be able to help you and your business, get in touch with the author of this blog today for a no obligation chat.
Alternatively, any member of our Commercial Property team is on-hand to assist as we're all working at full capacity.