Watch this Space: Points to note for landlords when dealing with social distancing drawbacks

31 July 2020

Author: Donia Reynolds
Practice Area: Real Estate

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It is now an accepted part of daily life that we all need to keep our distance to protect ourselves and others from COVID-19. This has become even more important when it comes to socialising. Landlords of pubs and restaurants in particular are increasingly likely to find themselves in receipt of requests from tenants for additional temporary space in order to make their businesses viable whilst complying with the constantly evolving COVID-19 legislation.

From a practical perspective, there may be little the landlord can do to grant a tenant additional space if it is not within its gift to do so. It is important to note however that if the tenant’s demise is extended this can act as a deemed surrender of the existing lease and a re-grant of a new lease. This is not appealing from a landlord’s perspective as it could result, for example, in a tenant claiming that liability for dilapidations under the existing lease prior to the re-grant of the new lease does not apply. A surrender and re-grant could also create an increased SDLT liability for the tenant.

It is likely that given the ever changing legislative position, that tenants will seek any concession only temporarily and so will usually be governed by means of a licence to occupy. In Northern Ireland particular consideration should be given to the potential for a licensee to claim that their licence arrangement is in fact a lease, thus attaining the same protection that a tenant can avail of pursuant to the Business Tenancies (NI) Order 1996. It is essential therefore that legal advice is obtained in respect of the form and term of the licence to be granted.

The provisions of the Licensing of Pavement Cafés Act (Northern Ireland) 2014 should also be considered when permitting a tenant to place temporary furniture in an outside public area for use for consuming food or drink (including alcohol). The provisions of the Act apply to all cafés, bars, hotels, guest houses and restaurants and the creation of what are known as ‘Pavement Café Licences’.

The authority to grant a Pavement Café Licence rests with the Council which covers the area in which the premises are located. An applicant for a Pavement Café Licence will be required to pay a modest administrative fee, complete the application form provided by the Council and submit this together with a plan which must show the location and dimensions of the public area which it is intended to licence. An important procedural requirement is advertisement of the notice of application on the premises in order to notify the public and to enable those who may wish to do so, to make representations to the Council.

Should you have any queries regarding how the grant of additional space to tenants or other tenant requests in relation to the COVID-19 legislation will impact you, please do not hesitate to contact the Real Estate / Licensing team at Carson McDowell.

*This information is for guidance purposes only and does not constitute, nor should be regarded, as a substitute for taking legal advice that is tailored to your circumstances.

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