The “New Normal”- what does this mean for your Commercial Property?
By now we will all have been affected by the changes and challenges 2020 has brought about. Not least businesses, which are having to quickly adapt to new guidance and get to grips with what the “New Normal” means for their sector.
Although there is an uncertain road ahead, there are some key considerations which tenants should bear in mind to ensure they future-proof their current commitments.
For many, increased online sales has led to the need for additional storage facilities whilst the need to comply with the all too familiar Social Distancing guidance has resulted in the need for increased floor space. At a time when further change is inevitable, it is natural as a tenant to want security but with limited liability. As part of the initial negotiations with your landlord when entering into a new lease, you may therefore ask for an option to terminate your lease at regular intervals, or even on a rolling basis. This gives both parties a level of certainty setting an agreed maximum term, but allows you the flexibility to terminate the lease as and when your property needs change. Whilst this may be less than ideal from the landlord’s perspective, a number of landlords are having to be more flexible these days, particularly in certain sectors, recognising the changing market.
But what if you have been able to make the move to effectively working from home and want to make this a permanent change? Unless your lease provides you with an option to terminate, you may find yourself tied in for the full term. You could seek to negotiate to bring the lease to end, but it is worth bearing in mind that your landlord has absolute discretion to reject any proposals and would be entitled to ask for a sum of money in return for agreeing the termination. Depending on the wording of your lease however, there may be other options available to you – you may be able to assign all your interest in the lease to a new tenant or sublet part or all of the property.
On the other hand, your property may still suit your needs but in order to ensure your business can fully comply with the Social Distancing guidance you may need to re-configure the internal layout. For example, you may wish to remove internal partitioning walls to allow greater Social Distancing. It is important you check the terms of your lease before you carry out any works to see if there are any specific prohibitions or conditions attached, such as obtaining your landlord’s consent or reinstating the property at the end of the lease term.
Whatever stage you are at, Thursfields’ Commercial Property experts are on hand to assist you find a solution adapting to the “New Normal”.