Property Law: Are keep open clauses enforceable?
In the current market where there is very little interest in taking on pub leases, solicitors are being asked to advise pub owners on the consequences of closing down their unprofitable pubs and what rights landlords have under their leases.
One area of concern that is often cited by clients is the 'keep open clause'.
These are a set of provisions often found in leases requiring the pub to be kept open for trading during the usual hours for that type of property.
However, pub owners should note that the courts will not generally grant injunctions compelling the owner of the pub to keep it open.
They may, however, award damages if it can be shown that the value of the landlord's land has been diminished by the pub being empty.
This is most likely to happen where the pub is in a complex or a development
There are many other issues to be concerned with, such as the continual rent obligation, the repairing obligations and payment of rates.
If you are considering walking away from your business you should speak to a solicitor so you know what the consequences are.
