Real Estate Tip of the Week: Re-occupation

Published 21 julio 2020

We set out below a number of practical steps and actions to help landlords as tenants begin to re-occupy shops, restaurants and offices.

1. Check your leases:

a. leases of estate buildings may have expired during the lockdown period leaving open the risk of the tenant acquiring security of tenure. A tenancy at will could be granted now to govern the terms of the occupation whilst terms for the grant of a new lease are negotiated;

b. rent reviews may have been due during the lockdown period. It is important to consider taking advice as to the type of rent review mechanism and whether the review should be implemented now or left until the economic climate is more certain;

c. the new social distance requirements are also likely to require tenants to make changes/alterations to premises to comply with new regulations. Check the alterations provisions in leases to be aware of what tenants can and cannot do, and what alterations will require landlord consent. It is important to engage with tenants and seek clarification as to whether they need to carry out works to re-open and, if so, for them to provide detail of the works proposed. Depending on the specific contents of each lease, any such consent should then be documented in a licence for alterations.

2. Building management

The new social distancing requirements will have a great impact on the re-opening of premises open to members of the public. Risk and health and safety assessments will need to be in place governing, amongst other things, the flow of people entering and leaving buildings, the designating of corridors, the limiting of capacity in common areas, reducing touch points, the erection of screens and barriers and increased hand sanitation points and ventilation.

3. Statutory Compliance

Inspections of electrical, gas, water and air conditioning systems should be carried out to ensure these are working safely after a period of lesser use and, if required, servicing of the equipment should be carried out. If any alterations have been made to a property to account for the new social distancing requirements, checks should be made to ensure that all insurances, planning and building regulations are in place for each.