How to “pop-up” in the High Street16.08.2013
With Government efforts to reduce the number of vacant shops and to breathe new life into Britain’s high streets, the introduction of new rules concerning the use of high street premises has led to pop-up shops quickly becoming a retail trend. The new legislation means that current uses for high street premises can now be altered, without planning permission, for a period of up to two years in the hope that this will provide flexible accommodation for new businesses and give existing businesses a chance to adapt to changing trends. The temporary shops that take over vacant retail property from anything from a few days to a few months are fantastic news for business but caution needs to be observed when taking advantage of this new opportunity.
Pop-up shops can be a great way of promoting goods or services, especially if the business is new or small and would struggle to keep up with the costs of running a property. For those seeking to open up a pop-up shop a few factors must be considered:
• When finding an appropriate property, landlords or their agents can be approached directly. Ensure that you have a written agreement in place and are clear about how long you want the property for and the rent you are prepared to pay for it.
• Pay attention to the terms of the agreement, which will state how you have to return the property and any maintenance responsibilities you may have.
• Don’t forget, if you are planning to provide any entertainment, or to serve alcohol or food between the hours of 11pm and 5am, you will need to obtain a premises licence from the Local Authority. Penalties for ignoring or breaching licencing laws can be extremely costly.
For landlords, pop-up shops are a way to generate rent and are a relief from paying business rates for the first six months the property is empty. Landlords should consider the following:
• Make sure that a formal tenancy agreement is in place. If a lease is not needed, perhaps consider a short-term tenancy, or a licence could also
be granted. Do not forget to include the maintenance of the property, and to guarantee that it will be returned in a suitable condition.
Legal advice should be sought to ensure that the correct form of tenancy agreement and appropriate documentation is used; this will avoid any potential lengthy and costly disputes.
• Verify that a pop-up shop will not affect the terms of any bank loans secured on the premises, and also bear in mind the terms of buildings insurance.
• The Local Authority should also be informed to guarantee that the liability for business rates is transferred to the tenant. In cases where the tenant is a charity, it is possible that they will qualify for reduced or no rates.
Overall, pop-up shops can be extremely profitable for both tenant and landlord as long as care is taken when making any arrangements. As always, it would be advisable to seek specialist legal advice.