[co-author: Rachel Lindberg]

The UK government’s actions are ramping up as it battles to contain the spread of COVID-19 and enforce social distancing. To assist with this, secondary legislation has been enacted to establish a new permitted development right for takeaways.

What are the new permitted development rights?

As of 10am yesterday, permitted development rights have been granted for a temporary change of use from either Class A3 (restaurants and cafes), Class A4 (drinking establishments), a mixed use within Classes A3 and A4, and a drinking establishment with expanded food provisions, to a use for the provision of takeaway food, which includes any use within Class A5 (hot food takeaways) and any hot or cold pre-prepared food for takeaway or delivery. This means that the usual requirement to secure planning permission for these changes has fallen away. The temporary change of use applies for any period between 24 March 2020 and 23 March 2021, and the developer must notify the LPA that the property is being or will be used for providing takeaways during this period. At the end of this period (or, if earlier, when takeaway food ceases to be provided) the use of the building automatically reverts to its previous lawful use – developers don’t need to take any additional steps other than no longer providing takeaways.

However, developers should keep an eye on the government’s advice as the public health situation develops. It’s possible that they may take away this right if more stringent measures are required. Whilst the government’s actions will be welcomed by a number of tenants considering moving to a new, temporary business model to deal with the COVID-19 repercussions, that is not quite the end of the story.

What are the practical implications?

A key term in any commercial lease from a tenant’s perspective will be that they can use the property for the permitted user only. Similarly, a landlord will inevitably want to protect its property and the landlord may operate “good tenant mix” policies and may be inclined to try and maintain a particular “quality” of tenant in, for example, its shopping centres. The landlord may therefore have relevant restrictions included in their leases, and should carefully check the lease of any property proposed to be used as a takeaway under the new permitted development rights.

Equally, if a tenant operating a pub or restaurant is considering a change of use to a takeaway, it will first need to consider whether it has the ability under its lease to do so. Whilst the government’s actions mean that a tenant does not have to be authorised by planning permission, or need their landlord’s consent to apply for planning permission, the tenant may still need their landlord’s consent to change the use of the premises.

If the use is not permitted, then the wording of the user clause will be important. Landlords will be familiar with the wording “such consent not to be unreasonably withheld or delayed” in a fully qualified user covenant, but if the user clause does not specify that the landlord’s consent cannot be unreasonably withheld or delayed, then there is no such wording implied by statute and the landlord would be able to prevent the tenant from changing its use.

If the landlord does gives its consent, it should consider specifying that it is for the temporary period to 23 March 2021 only so it is not deemed to be giving its consent for a change of use after that date, although a tenant would likely have to apply for landlord’s consent to apply for planning permission after that time anyway. If there is an absolute prohibition on takeaway use in the lease, but the landlord nevertheless wishes to consent, then it will need to consider carefully how to protect its position against possible unintended consequences, particularly as regards guarantors, given that this could amount to a deemed variation of the lease.

For material that will help you run your business, as well as details of our business continuity planning, our COVID-19 Topic Centre houses all of our resources on the topic – from crisis leadership to supply chain.

[View source.]