The recent upheaval surrounding Gordon Ramsey’s restaurant serves as a stark reminder of the critical importance of safeguarding your lease and why property management cannot be ignored.

Chef Ramsey faced an unexpected challenge recently when squatters seized control of the York & Albany pub in Regents Park which was temporarily closed whilst the chef was negotiating the signing of a new lease. The squatters have reportedly now left the restaurant but this did come at a significant cost and much publicity. The incident has shed light on the vulnerability of property owners to unauthorised occupation, underscoring the need for robust property management.

Squatters are a problem for commercial property owners and one that is not easy to overcome. In 2012 the UK Government introduced the Legal Aid, Sentencing and Punishment of Offenders Act 2012 which criminalised the act of squatting in a residential property. However, the act does not cover and protect commercial properties.

For both commercial landlords and tenants with an empty property, the issue is of significant importance. The landlord will have to pay full business rates without tenants there to cover the cost and alternatively if tenants have temporarily vacated the premises, they will still be responsible for paying rent and all outgoing sums subject to the terms of their lease. The longer the property remains occupied by squatters, the longer the landlord and commercial tenant has to endure this costly period.

Whilst a commercial landlord and tenant can take certain measures to evict/seek re-possession of the property via the courts, there are steps which can be taken prior to minimise such a situation arising. Practically these include:

  • Hiring a security guard to secure the premises at periods of high risk;
  • Ensuring that the property is secure which includes having locks, boarding up windows and doorways and CCTV; and
  • Investing in an alarm system that links directly to a security company if activated.

In chef Ramsey’s case he was currently negotiating the renewal of his lease and had to close the restaurant whilst this was ongoing. This situation could have been avoided by taking appropriate steps and having a plan of action in place. Some of the steps that a commercial tenant should consider should they want to avoid being found in a similar situation are as follows:

  1. Is your lease going to be inside or outside of the Landlord and Tenant Act 1954

The Landlord and Tenant Act 1954 (‘the Act’) provides that, at the end of the term of a business tenancy, a commercial tenant has the legal right to reman in the premises and an automatic right to a new lease subject to section 30 of the Act. Therefore if you wish to have security knowing that your lease can automatically be renewed this is an important point to consider especially if you have built up goodwill at the property or you are an ideal location (such as in the case of chef Ramsey’s pub in Regent’s Park).

However, if the lease is contracted outside of the Act, it means the tenant has no statutory rights to renew the lease. Such an exclusion of the Act will be expressly stated within the lease, and you will be required to carry out a statutory declaration prior to executing and completing the lease to confirm you are aware and understand the implications of this.

  1. Negotiate a new lease directly with your landlord

If your lease has been contracted out of the Act this is not an uncommon position. Some landlords insist on having the lease excluded from the Act so that they can retain control of the property upon the lease’s expiry. However, this does not mean that you cannot directly negotiate a new lease with your landlord during its existing term. By understanding this and tackling the problem early on you could avoid being in a position where the premises is having to be closed and left vulnerable to unsuspecting squatters taking possession.

The Commercial Property team at Lewis Denley are highly experienced in acting for both landlords and tenants. We provide experience along with a fresh innovative approach to each individual matter and legal problem. If you are looking for assistance with a lease please get in touch with a member of our team.