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Business
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6/24/2010
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A landlord's right to enter my pharmacy - should I be worried?
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Pharmacists must be aware of landlords entering their pharmacies
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Nearly all property leases have a list of the landlord’s “exceptions and reservations” and which include the landlord’s ( and others’) rights to enter the property for various purposes. Reason for entry In general, the rights to enter are for the purpose of the landlord checking that the pharmacist has complied with the lease obligations such as the requirement to repair, maintain and clean the pharmacy. The landlord might also wish to check up on whether or not the tenant has carried out any alterations or is selling goods not permitted under the permitted use clause.
Repairs
The landlord may also wish to enter so as to carry out his own repairs to adjoining shops or other parts of the building in which the pharmacy is located. There are likely to be more rights of entry permitted where the pharmacy is in part of a building. A well drafted pharmacy lease will have a number of protective clauses in it so as to stop the landlord entering the property too frequently, without proper reason, or disrupting the pharmacy business and causing damage. Some key points The key areas to check are:
1) Ideally the landlord should be obliged to give a set period of written notice to the pharmacist before entering. Sometimes the lease refers to “reasonable notice” i.e. no set period and not written – so not ideal. No notice is usually required in an emergency 2) The landlord should not be entitled to enter the property without being accompanied by a member of the pharmacy tenant’s staff if it is a large pharmacy .This is so that the tenant can monitor the behaviour of the landlord. 3) The landlord should identify the specific purpose for which he wishes to enter. Some leases have a general “sweeper” clause which allows entry where the landlord reasonably considers it necessary. As a tenant, this should be avoided. 4) The landlord can enter with plant and equipment and with workmen where necessary – but subject to restrictions on interference with the business. 5) There should be an obligation not to cause any damage. This is usually restricted to damage to the property itself and not to any fixtures, fittings or stock. Therefore, if there is damage to these items and negligence cannot be proved, it may be necessary for the pharmacist to claim on his own contents insurance. 6) An obligation to make good any damage caused (usually to the property) is common and should be included. 7) Whilst it is not standard in pharmacy leases to include any confidentiality provisions, and this may not be necessary, it should be considered if there is any particularly commercially sensitive information available which would be revealed on an inspection. 8) The landlord and the persons entering should be under an obligation to minimise any disruption to the business. If there is significant disruption, then it may well be possible to claim that the landlord has breached the quiet enjoyment covenant in the lease, as well as perhaps going outside the express rights of entry.
Forfeit
The above rights of entry are different to the right of re-entry to forfeit the lease which the landlord may exercise if the tenant is in significant breach of the lease and/or has failed to pay rent. Adjoining tenants and owners might want to enter the pharmacy , for example so that they can carry out works to their own property, often due to an obligation to their landlord. So should you be worried? As a general rule, landlords do not frequently inspect premises unless there is a risk of there being a breach, they are monitoring ongoing works or showing around a buyer of the property. If they do wish to enter the property, they should abide by the terms of the lease. The pharmacist may have a reason to exclude them if there is no authorised reason for entering or the landlord does not comply with the notice and other provisions in the lease. From a practical viewpoint, most tenants do permit the landlord to exercise their rights of entry and, of course, it is very difficult to exclude a landlord during the pharmacy opening hours. However, if the right of entry might be detrimental to your business, it might make sense to negotiate in the lease that any rights of entry for the purpose of checking repairs, breaches, etc should be after hours and by appointment with the pharmacist . Whilst this is not always agreed by landlords, it is definitely worth requesting. The above is a general overview and we recommend that independent legal advice is sought for your specific concerns. For guidance please contact Debra Kent the Head of the Pharmacy Real Estate Team at Charles Russell LLP on Debra. Kent@charlesrussell.co.uk.
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