Publication date: 21 September 2018
The use of e-commerce has increased in recent years. This has brought about changes in real estate. As a consequence the use of stores will change. In such changes zoning plans and potential lease agreements must be taken into account.
Due to the emergence of e-commerce the retail landscape is changing: think merging of functions (blurring), showrooms, pick-up locations and vacancies. But what about the legal requirements? Can you just change your store or leave it empty?
E-commerce is, in short, trade via the internet. The internet brings together demand and supply. As a result, physical stores are becoming redundant and standing empty or are transformed into showrooms where products can be touched and tested before they are ordered online. Some retailers add an extra “experience” to their shop, for instance a café serving special coffees, to still attract customers.
Entrepreneurs wishing to change their stores for or by e-commerce are well-advised to assess in advance whether the change will be in line with the zoning plan and the lease agreement. If you serve coffee, the question is whether the use as a store also allows for a (secondary) use as restaurant or café. So far, e-commerce is taken into account in few zoning plans only. Then, an integrated environmental permit for derogating from the zoning plan might be a solution.
If a building is leased, the question is whether the lease agreement allows for the new intended use. If not, the lessee will have to discuss the adjustment of the lease agreement with the lessor ahead of time. The lessor is not required to assent to this. Use in breach of the agreed use can be a ground for termination of the lease.
A transition from store to showroom for online sale (only) may also lead to a change in the statutory rent regime, with major consequences. The lease protection a lessor of retail space enjoys does not automatically apply if the lease agreement is converted into a showroom or distribution area. The lessor can terminate a lease agreement for showroom or distribution area more easily and within a shorter period.
Also, retail space is often leased for five-year periods and renewed. If the store operates at a loss, the lessee can become trapped between the mandatory exploitation from the lease agreement and the impossibility to terminate the lease early. Only in exceptional cases the mandatory exploitation will lapse and the lease agreement can be terminated early, for instance, in the event of a structurally loss-making operation due to a cause that cannot be attributed to the lessee. In all other cases we advise the lessee to seek a different solution in consultation with the lessor, for instance a sales-based rent.
By drawing on our expertise in the field of retail, Russell Advocaten can advise you on zoning plans, environmental permits and lease agreements and assess which steps must be taken to integrate e-commerce in your concept. Please contact us:
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