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If you have any questions relating to this article or would like a free initial consultation, please contact Philip Jacques on [email protected]
In last week’s article Tim Blackman and Nick Carter discussed the sorts of advice that businesses have been requesting since the start of the lockdown. This started with questions about the best way of adjusting lease payments to support tenants at this time and more recently about whether leases can be terminated early or if they can reduce the amount of space.
As many businesses have made huge adjustments to their internal processes to enable working from home many tell us that they are surprised at how well it is working and how productive this can be. Naturally this has led to questions about how much office space is actually needed in the future. With the added draw of the considerable savings that downsizing would bring, along with other lifestyle and wellbeing benefits, many may decide that a full-time office-based desk isn’t as important as we all once thought.
We therefore expect to see changes in this sector as companies look to move into smaller premises or look to offload space (and reduce costs) by way of subletting or assignment. We also expect to see businesses making design/lay-out alterations to facilitate what we now call ‘the new normal’.
The key principles are not only set out in the terms of leases themselves, but are governed by a strict statutory regime - the main purpose being to protect tenants and facilitate the marketability of properties.
To get this wrong can lead to delays in getting rid of unwanted space and if that delay leads to a potential tenant walking away can lead to claims for damages for “unreasonably withholding consent”.
The majority of commercial leases provide that a landlord cannot “unreasonably withhold or delay consent” to applications to assign or sublet a lease or to carry out alterations. The statutory regime dictates how the landlord should respond to applications.
Both landlords and tenants would be well advised to seek professional advice early in the process.
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.
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If you have any questions relating to this article or would like a free initial consultation, please contact Philip Jacques on [email protected]
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