COVID-19 – legal implications
‘The tenant will at its own cost observe and comply with all legal obligations relating solely to the premises, or to its use of them.’ Are tenants not now in a position to demand that the premises they pay good rent for are statutorily compliant with the FSO from the outset of the lease? Why should a tenant foot the bill for ensuring that structural compartmentation, fire doors, fire alarm systems, emergency lighting and any other general fire precautions that form part of the fabric of the building are fire safety compliant? Is it not in a landlord’s interests to make sure that his premises are safe in this way? Obviously, a lot depends upon the length of
the lease. It is only right that the tenant should bear some responsibility for the upkeep of the fabric of premises when leases are in existence for ten to 20 years. But shorter term leases are becoming more commonplace. This is another area where tenants will be in a stronger position to negotiate. Landlords will not be in a position to demand substantial minimum terms of tenure, as the tenant will have a much wider choice of premises to choose from and may not wish to commit beyond three to seven years. In such situations, the tenant is not likely to want to invest heavily in premises from a fire safety point of view. Those premises which are fire safety compliant from the outset will become much more attractive.
Commercial premises
Tenants of retail premises are likely to be in a very strong position. Shop landlords will already be acutely aware of the shift in supply and demand. Retailers are already demanding rent reductions and shorter leases to minimise their exposure to long term financial commitments. Pub, club and restaurant premises will now also be significantly affected. I have been involved in cases where large corporate organisations such as pub chains attempt to abrogate all responsibilities under the FSO, in spite of continuing to benefit from rents and income directly from premises within their control. Two particular cases spring to mind. In both
cases, the pub chains attempted to hide behind full repairs leases and clauses which indicated that the tenant (pub manager) was solely responsible for compliance with statutory requirements, although neither lease in question referred to the FSO or fire safety responsibilities specifically. Both cases involved licensed premises where the exit route from the upper floor (which the pub chain required the tenant to let out to the public) led directly into the bar of a public house. There was no issue with the fact that the pub chains were aware of this fact. The courts found in favour of the tenants in both cases, which involved leases requiring the tenant to obtain the pub chain’s consent
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www.frmjournal.com JULY/AUGUST 2020
37
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