Blog - 14/12/2020
Shop till you drop but landlords and tenants beware
We know that Covid-19 has made life very difficult for retail tenants. In addition to the potential lack of shoppers pre-Christmas and the boom in online retail there are still large swathes of the country subject to Tier 3 restrictions meaning shops cannot still open.
The Government has tried to help retailers in these unprecedented times. In addition to the continuing moratorium on forfeiture of business leases (please read our previous update) there is now the ability for retailers in areas not in Tier 3 to extend their daily opening hours from Monday to Saturday in the run up to Christmas and through January 2021.
The thinking behind this extension in addition to the obvious potential additional revenue is to allow safer shopping. Communities Secretary Rt Hon Robert Jenrick MP said “None of us entirely enjoy navigating the crowds, especially now when social distancing is so important for controlling the pandemic. So with these changes your local shops can open longer, ensuring more pleasant and safer shopping with less pressure on public transport.”
The Communities Secretary went on to say “How long will be a choice for shopkeepers and at the discretion of the Council. Councils should offer these hard pressed entrepreneurs and businesses the greatest possible flexibility this festive season.”
This is an interesting statement as the one person who is not mentioned in this statement is the actual owner of the land in which the shop is situated. Ordinarily shops will be occupied by tenants under leases or some form of tenancy agreement. The tenant’s occupation of the premises and what they can do in the premises will be subject to those leases or tenancy agreements.
The terms of those documents will often include two provisions relating to the permitted use of the premises;
- A clause confirming the hours when the premises can be traded from, and
- A clause requiring the tenant to comply with all planning restrictions.
If a tenant therefore wants to extend their trading hours before they contact the local authority they should also consider the terms of any lease or tenancy agreement. Any tenant would need to check the terms of their occupational documents to ascertain the hours they are permitted to trade and any restrictions on that. They may therefore have to get the consent of their landlord before approaching the local authority.
Despite the fact that the landlord will want to receive rent from its tenants (and these extended hours will assist), the tenant should not take the landlord’s consent for granted. For example if the shop has flats above it the Landlord may have given covenants to the tenants of those flats that the retail premises will only be open at certain times. There may also be covenants on the landlord’s title to the land preventing the use of the land during specific hours.
In addition these temporary measures make it clear that the Government is expecting local planning authorities to take a positive approach when engaging with retailers who wish to extend their opening hours and look to relaxing local restrictions where possible. The tenant however should be wary that their lease or tenancy document may prevent such approach without landlord’s consent. In shorter tenancies there may also be a complete prohibition on such applications to the local authority. The occupational documents should therefore be checked to ensure the tenant is proceeding in the correct manner.
It is therefore imperative for both landlords and tenants to seek advice respectively on their position in relation to extending trading hours. In the case of landlords, is there anything preventing them giving consent, if they are happy in principal to do so. For the tenant have they the right to request consent and if so do they require the prior consent of their landlord.
Even though these government measures are a temporary consent there is still the potential of breaching the terms of your agreement or covenants of title unless the correct steps are taken. So without sounding too much like a Scrooge in response to such a positive initiative, please beware.
If you have any concerns about this update and would like to speak to an expert, please contact Clayton Beerman or any member of the Property team.
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Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.
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