Opinions On My Office Rent Conundrum

[DSLiverpool]

We are in a social type office of hot desks, resident desks and actual offices of which we have 2 for 20 staff, anyone can have a hot desk for a day so there is no isolation whatsoever.

Craftily they have kept the building open using the weekend access method and continue to update on post etc but they dont have a full time person on site (used to be 4)

We stopped being office based 13th March and have worked from home ever since with no real thoughts of an imminent return.

We pay in advance so all of March was paid and I have offered them 50% for March, April and May as no discussion or offer had come from the landlord whatsover.

I checked the contract and thought possible Force Majeur might apply but they say no and we need to pay all the rent in full. I accept we are in contract and dont want any "just pay it" answers I am interested in options I may not have thought of. (Just to add its £5k a month rent so I am not being sniffy over a k or two)

Cheers

[Stay in Bed Instead]

You only want opinions on how not to pay it then?

[DSLiverpool]

Stay in Bed Instead said:

You only want opinions on how not to pay it then?

Yep - we are not using it through no fault of our own and the landlord has not come to us with anything whatsoever. We have offered 50% so not being unreasonable - what would you do?

[psi310398]

I'd guess you'd need to look at the detail of written agreement, particularly the service levels. On the face of it, if you are paying for a manned operation and they are not providing it, you might have some leverage, as there appear to be double standards at play.

Indeed, while you might have trouble keeping a straight face arguing that a hot desk business 'requires' people to go into work i.e. that travelling into work is essential, I'd suggest (subject to what the agreement actually says) that the landlord would struggle to meet his obligations without staff actually being present i.e. that travel is essential, given that their work is tied to a location.

Also, are there any H&S or insurance requirements the landlord is not meeting?

[Stay in Bed Instead]

DSLiverpool said:

Yep - we are not using it through no fault of our own and the landlord has not come to us with anything whatsoever. We have offered 50% so not being unreasonable - what would you do?

Do you have a contracted office or just hot desking?

[elanfan]

Take the opportunity to buy it at a knockdown price? Agree any rent paid now comes off the price?

[DSLiverpool]

psi310398 said:

Also, are there any H&S or insurance requirements the landlord is not meeting?

This is my angle I have sent the contract to my legal advice service who said they are inundated with this scenario BUT there is no one full time on site for the resident desks or offices whichh will fall under agreed service levels. I dont want hassle of conflict hence offering 50% but as its owned by a chap with consoderable serious wealth I have little sympathy and will fight it. We are the secong biggest in the building and the other company paying over £5k are not paying eirther.

[DSLiverpool]

Stay in Bed Instead said:

Do you have a contracted office or just hot desking?

"actual offices of which we have 2 for 20 staff"

[Stay in Bed Instead]

DSLiverpool said:

"actual offices of which we have 2 for 20 staff"

Is the landlord prohibiting or restricting you from utilising them?

[DSLiverpool]

elanfan said:

Take the opportunity to buy it at a knockdown price? Agree any rent paid now comes off the price?

If I had access to several tens of millions I might but we are in a buiding with GF food and a few offices, mezz is office / hot desk / resi desk and then 9 floors of apartments mainly let to rich overseas uni students.

Also this lockdown has made us realise that maybe we dont need the team in sight every day.

[DSLiverpool]

Stay in Bed Instead said:

DSLiverpool said:

"actual offices of which we have 2 for 20 staff"

Is the landlord prohibiting you from utilising them?

We have unmanned access which for a normal working day is below the ASL we are contracted to. I would also say a socially mixed office space is a risk to my and my teams health.

[plasticpig]

What's your notice period? Guessing 3 months.

[Stay in Bed Instead]

DSLiverpool said:

We have unmanned access which for a normal working day is below the ASL we are contracted to. I would also say a socially mixed office space is a risk to my and my teams health.

So is a supermarket or going outside though.

Your only argument for a reduction is that the landlord is failing to provide services for which they are contracted to provide. Does the fact that their staff are no longer on site constitute this? What did they do that that are now no longer doing?

I rented a serviced office many years ago and they answered the phone and sorted out each tenants mail, sent faxes.

[DSLiverpool]

plasticpig said:

What's your notice period? Guessing 3 months.

I need to double check but I think it’s that one office is 12 and the other 24 months unless we can get another tenant which I doubt at present.
I don’t want to leave I just think when everyone is working together to get through tough stuff they should compromise. It’s not like they have a waiting list right now, Liverpool had more offices than people before Corona.

[psi310398]

DSLiverpool said:

I need to double check but I think it’s that one office is 12 and the other 24 months unless we can get another tenant which I doubt at present.
I don’t want to leave I just think when everyone is working together to get through tough stuff they should compromise. It’s not like they have a waiting list right now, Liverpool had more offices than people before Corona.

With that kind of notice period, the sums in question suggest you'd probably be better off seeking professional legal advice, particularly on the materiality of any breach on his part, what remedies are open to you and even whether he can be held to have repudiated the contract.

I'm not suggesting for a moment that you walk away but being armed with a range of legally vetted options should facilitate a more realistic discussion. Some options might be chancier than others but presumably your landlord would also be getting similar advice from his lawyers if it looked like you might just walk.

And nobody sane wants to litigate if they can possibly avoid it.

[DSLiverpool]

psi310398 said:

With that kind of notice period, the sums in question suggest you'd probably be better off seeking professional legal advice, particularly on the materiality of any breach on his part, what remedies are open to you and even whether he can be held to have repudiated the contract.

I'm not suggesting for a moment that you walk away but being armed with a range of legally vetted options should facilitate a more realistic discussion. Some options might be chancier than others but presumably your landlord would also be getting similar advice from his lawyers if it looked like you might just walk.

And nobody sane wants to litigate if they can possibly avoid it.

I don’t want to leave, since moving in 2 years ago we’ve grown and the location has helped (Liverpool waterfront) as a business we are luckily remarkably unaffected (at present) and we like the office.
I’ll wait to see what legal comes back with but I just want a discount for the period of none occupation - a bit of 2 way street from the owners.

[psi310398]

DSLiverpool said:

I don’t want to leave, since moving in 2 years ago we’ve grown and the location has helped (Liverpool waterfront) as a business we are luckily remarkably unaffected (at present) and we like the office.
I’ll wait to see what legal comes back with but I just want a discount for the period of none occupation - a bit of 2 way street from the owners.

Sure, nobody moves offices lightly.

But, as you will be well aware, your negotiating arm is strengthened if your counterparty thinks you are prepared to walk away. If he does not believe that, why would he concede, if he hasn't already?

[i4got]

DSLiverpool said:

I don’t want to leave, since moving in 2 years ago we’ve grown and the location has helped (Liverpool waterfront) as a business we are luckily remarkably unaffected (at present) and we like the office.
I’ll wait to see what legal comes back with but I just want a discount for the period of none occupation - a bit of 2 way street from the owners.

But this sounds like a one-way street. I don't see what is in this for the landlord. May be worth putting yourself in the landlords position and imagining what offers may be attractive to you. For example its possible they may have cashflow issues at present. So asking for a 50% reduction but paying the next 6 months up front may be attractive?

[plasticpig]

DSLiverpool said:

I need to double check but I think it’s that one office is 12 and the other 24 months unless we can get another tenant which I doubt at present.
I don’t want to leave I just think when everyone is working together to get through tough stuff they should compromise. It’s not like they have a waiting list right now, Liverpool had more offices than people before Corona.

Hmm I thought serviced office contacts were usually more flexible than that. 50% would seem a fair compromise to me. 50% is better than nothing after all and getting a new tennant in is going to be difficult for them if you just up sticks and refuse to pay.

They can't evict you until after the 30th of June anyway due to section 82 of the Coronavirus Act which protects commercial tenants against eviction. So I would point this out to them and tell them to talk to you about payment towards the end of June.

[DSLiverpool]

Food for thought chaps, I’ll update next week after a few more games of rent tennis.