In a worrying sign for the high street, several major retailers have gone into administration recently - TJ Hughes and women’s retailer Jane Norman have both called in the administrators in the last month alone – and with 90 commercial outlets between them, this signals bad news for their landlords.
In addition, chocolatier Thorntons has also announced that they are considering a partial move away from the high street, closing 120 of their 599 shops over the next three years.
Those considering closing poor performing stores would be urged to check their leases for ‘keep-open clauses’ which aim to protect the landlords’ rental income for the duration of the lease.
David Baybut, Commercial Property partner at Stephensons Solicitor LLP, said: “A keep open clause is essentially an obligation for the tenant to keep trading through out the duration of their lease.
“A landlord of, say, a shopping complex would favour keeping the value of their investment up by having each unit occupied, to attract shoppers and maintain a vibrant atmosphere, which is why keep open clauses are often included in the terms of a lease.
“But recently English courts have been unlikely to enforce the clause, except where it can be proven that the store closing is an anchor store or a significant tenant that would detrimentally affect the rest of the development/high street.”
There are options open to commercial tenants with keep open clauses in their lease. Speak to one of our commercial property solicitors for advice and assistance: 08442 435 434.