The Great Comeback Series: Commercial Lease Negotiations ' What Now?

• Published date: 20 March 2021
• Subject Matter: Corporate/Commercial Law, Real Estate and Construction, Corporate and Company Law, Contracts and Commercial Law, Landlord & Tenant - Leases
• Law Firm: Gunnercooke
• Author: Marc Warren

The government has announced our return to normality this summer, meaning an inevitable end at some point soon to the various support packages - the most relevant for the commercial lettings market being furlough (which has just seen what is probably its final extension in the budget) and the protection of tenants from eviction.

This article considers what we believe will come next in the new normal for the occupation of leasehold commercial premises. The relaxation of lock down will have huge potential implications and opportunities for a property sector which over the past 12 months has been radically reconstituted.

Victims of coronavirus

There have been many economic casualties in the property sector. Various factors have caused such casualties - some were simply victims of the circumstances and/or in the wrong place at the wrong time, for example hospitality operators. Others were poorly equipped pre-coronavirus and did not have time to adapt to the changes in circumstances. Successful operators were either already well geared up or have been able to evolve and maximise opportunities by harnessing the online distance selling marketplace.

Relationships

Thankfully a lot of what we have seen during the pandemic has involved give and take - resulting in mutual agreements between the parties. Unfortunately where people have fallen out, landlords are especially pleased that they will soon be finally free of the shackles that have prevented them from evicting their tenants. On the other hand, we believe most tenants have been pleased to find landlords willing and able to nurture them through this horrific period.

Unless the relationship has totally broken down, occupiers and owners usually have very closely aligned interests and this includes the success and longevity of what is a symbiotic relationship. Landlords want to see tenants operate and be profitable and tenants want to pay the rent and benefit from the space. It is such a shame that we have witnessed some instances in which the parties have not come to mutually acceptable solutions during the past year and we expect that unless steps are now swiftly taken to rectify those situations, it is those cases that will unfortunately (for clients!) keep our property litigation colleagues busy this summer. In any relationship, trust is key. How people have behaved / behave now will undoubtably impact on the future. It will also impact potential deals going forwards.

Our experience and expectations for...