Further to the guidance publishing by the government, it looks as though some measure of social distancing will remain in place for the foreseeable future. Landlords and tenants will need to scrutinise the terms of their leases closely to understand what their obligations are to ensure workplaces are safe when employees return to the office.
It is likely that some measure of social distancing will remain in place for the foreseeable future. How will landlords and tenants need to modify office space to make social distancing work?
Further to the guidance publishing by the government on 11 May 2020, it looks as though some measure of social distancing will remain in place for the foreseeable future. The manufacturing and construction industries are being encouraged to go back to work, with other industries to follow.
The government is working to produce a coronavirus standard for workplaces to meet to ensure they are safe for all. This is likely to include positive obligations on employers to provide changing facilities, bike storage and car parking wherever possible, as well as measures to ensure employees are two metres apart at all times.
In order to contain the virus, the government has mandated that office space will need to be modified to reduce pinch points in kitchens, canteens and printing spaces. Employers will need to open up entry and exit points and consider the use of lifts and desk arrangements – particularly in open plan offices – to ensure employees remain two metres apart and, wherever possible, adjacent to each other at all times.
There is also likely to be a mandatory requirement that communal areas in offices are regularly cleaned, as there is evidence that the virus can survive on any hard surfaces for up to 72 hours.
Landlords and tenants will be looking to their leases when considering what services, for example cleaning services of communal parts, landlords must now provide.
Landlords will also need to consider to what extent communal areas of buildings need to be modified, for example designated entrances and exits to create a one way system to maintain social distancing. They will also need to consider providing additional cleaning around doors, communal facilities such as kitchens and, in particular, whether any such costs can be recovered from a tenant under the service charge provisions in the lease.
Landlords and tenants will also be looking at the need to make alterations to premises and what can and cannot be done given the existing lay out of their premises. In most leases, tenants can usually make non-structural alterations to the internal parts of their property providing they have the consent of the landlord. Such consent must not be unreasonably delayed or withheld.
In the circumstances, the hurdle to not unreasonably refuse consent is likely to be one that can be more easily met, providing steps taken are proportionate and necessary to meet government guidelines on social distancing.
Landlords should also consider to what extent additional alterations made by a tenant will need to be removed or restored at the end of the lease. This will depend on the scope of the tenant’s yield up provisions as to what a tenant has to be remove at the end of the lease.
Likewise, tenants need to be aware that any change to the internal lay out of a property may need to be reversed and any damage caused made good. The particular scope of this obligation will depend on and be set out in the terms of the lease.
If tenants do not pay attention to their yield up provisions they may be faced with a larger than expected dilapidations claim at the end of the lease, while landlords may have the premises returned to them configured differently to the way they were at the outset. This may need to be accounted for when looking to re-let the premises at the end of the lease.
Here are five recommendations to help landlords and tenants manage the situation:
1. Landlords should now carefully consider what (if any) additional services – for example cleaning and restrictions on access – they are now required to provide to make the communal areas in multi occupancy offices safe for employees to return to work.
2. Where landlords are required to provide additional services, they should consider whether any or all of those costs can be recovered from tenants under the service charge provisions in the lease.
3. If tenants are considering making alterations to the internal parts of the premises, they should review the terms of their lease to see if there are any restrictions on making alterations and, in particular, whether they need to gain the landlord’s consent in order to do so.
4. If the tenant does wish to make alterations to the internal parts of the premises, they and the landlord should consider to what extent the tenant is required to remove any alterations at the end of the term of the lease and make good any damage caused.
5. Tenants should approach their landlord to agree the details and scope of any alterations before work is carried out. Landlords should also speak to tenants about any alterations being made to the communal areas to ensure the safety of the tenant, their employees and any visitors.