Coronavirus (COVID-19): Business Tenancies – Who should pay for additional cleaning costs?

These measures have tended to comprise a more frequent and generally more thorough approach to the cleaning of communal areas, including the provision of antibacterial hand gel dispensers and the disinfection of major contact surfaces such as door handles and lift controls.

The parties to a business lease may be unsure of their obligations in relation to these enhanced cleaning measures.

Partner and commercial property solicitor, Chris Twaits, and trainee solicitor Theo Tendler identify some key considerations for commercial landlords and tenants:

The landlord’s obligations

Though the government has not legislated in this regard, it is likely that a duty to provide enhanced cleaning services to prevent the spread of Covid-19 arises under existing health and safety law.

Current health and safety legislation imposes on landlords an obligation to ensure the health and safety of people working in or visiting the building. Landlords also have a duty to prevent exposure to hazardous substances under the hazardous substances regime. The prevention of exposure to Covid-19 is likely to fall within the scope of these provisions.

Of course, the landlord’s duty extends only to those parts of the premises over which the landlord retains control. If the entire building is leased on a full repairing and insuring basis, for example, it will usually fall to the tenant to ensure compliance with any health and safety requirements.

Recoverability of costs

Whether landlords can recover the costs associated with any additional cleaning responsibilities rests largely on the service charge provisions in the lease. Most commercial leases oblige tenants to pay service charge, designed to cover the landlord’s costs of the day-to-day upkeep of those parts of the building over which it retains control.

Though the enhanced cleaning measures necessitated by Covid-19 are likely to fall outside the scope of the day-to-day cleaning envisaged by most service charge clauses, landlords may find that they are able to rely on aptly named “sweep-up” provisions.

These provisions are commonly included within service charge clauses and generally enable landlords to recover reasonable costs incurred in line with “good estate management”. Depending upon how the lease is drafted, landlords may find that they are able to rely on such provisions to recover via service charge the additional cleaning costs.

It is also common for service charge provisions to permit landlords to recover costs incurred in complying with “applicable laws”. Though there is no specific legislation requiring enhanced cleaning measures to prevent the spread of Covid-19, it is likely that existing health and safety legislation would be applicable law for these purposes.

Limits on the extent of recovery

The parties should be wary of any cap on service charge imposed by their lease. Landlords will not be able to exceed the capped amount when seeking to recover costs from their tenants.

It is also worth noting that landlord costs for enhanced cleaning measures will be subject to any specific exclusions contained in the lease. Costs relating to excluded items will not be recoverable.

Landlords should also be mindful that any additional cleaning costs must be reasonable. What is considered “reasonable” in each case will depend largely on the nature of the premises – a healthcare setting is more likely to justify greater attention to coronavirus-preventive cleaning than general retail or office space, for example.

Financial challenges

Unfortunately, prevailing economic conditions mean that many tenants may struggle to meet additional costs.

The government’s recent package of emergency coronavirus legislation includes protections for tenants that cannot keep up with payments due under their lease, core details of which can be found at: Coronavirus (COVID-19): Business Tenancies – Five Things You Should Know.

*The information set out in this article is correct at the date of publication (27 April, 2020). The effect of coronavirus on businesses is a fast-changing area and so it is important to obtain legal advice to ensure you are properly protected.

Contact us

If you have any questions regarding the impact of the Coronavirus upon your business or are seeking up-to-date legal advice on Commercial Property matters, contact Chris Twaits on 01202 294 566 or email [email protected]. Alternatively, contact a member of our Commercial Property team in Bournemouth.