When the Covid-19 pandemic struck, working from home became the new normal. But, with the lack of face-to-face interaction and, in particular, for those who didn’t have a suitable environment at home, it soon became apparent that working and living under the same roof wasn’t how many of us wanted to spend our every day.
With the hospitality industry being one of the worst-hit sectors by the pandemic, many owners of empty pubs, cafés and restaurants have come up with the innovative concept of a “pub desk” as a way of generating income from their under-used premises.
In return for a daily fee, the pub provides a designated space from which to work with access to a power supply and WiFi. Many pubs are also offering a lunch menu plus unlimited tea and coffee. The pub desk concept is not limited to the hospitality industry.It can apply to almost any commercial property that has disused space.
Switching empty spaces for hot desks
If advertised well, there is high demand for flexible workspaces and this demand is likely to continue. Many businesses have temporarily closed their offices or decided to close altogether after seeing how they can operate successfully without people being in the same building. For the individual, a flexible workspace offers that degree of separation between home and work while significantly reducing the commute.
Hotels have been another example of hospitality space being repurposed for desks. They have been able to extend their offering, for example, by including access to their gym as part of the daily fee. With many office occupiers operating on skeleton staff only, there may also be space for workers from outside their business to hot desk in their building.
What are key issues to consider before a business decides to adopt the pub desk concept?
Check the terms of your lease
If the business leases its premises, are there any terms in the lease which would prevent the tenant from implementing the pub desk idea? Most commercial leases will prohibit the tenant from sharing occupation of the premises with anyone other than group companies. If the lease does contain this prohibition, then it may still be possible to generate income from disused space by subletting the space to a third-party occupier. The landlord’s consent is often required before a sublease can be entered into.
There is an important distinction between the informal arrangement of a hot desk and a formal lease arrangement. With a lease, the tenant is given exclusive possession of a specified area in return for the payment of rent. Business owners must be careful not to allow any pub desk to become an arrangement whereby a person is given exclusive possession to an area to the exclusion of the property owner in return for the payment of a sum of money. If this situation arises without a formal lease in place then the occupier may gain rights to remain in the premises.
A building owner considering a request from one of its occupiers for permission to implement the pub desk concept in their premises will need to be wary about agreeing to any arrangement whereby a formal tenancy may inadvertently arise.
It is important for building owners to fully understand what arrangement the tenant wishes to implement and consider this in light of the terms of the lease. The owner will want to ensure that it is not left with occupiers which they cannot require to vacate the premises.
Other issues
Are there any planning or title constraints which would prevent the premises being used in this way? Can the business comply with the government’s Covid-19 restrictions, which are in place from time to time nationally and regionally? This includes implementing Covid-secure measures to ensure that people using the space feel safe. Will data protection, confidentiality and security (including cyber security) issues arise if multiple businesses are sharing the same space?
Whether you are the building owner or only the occupier of the building you need to consider whether the use of the property in this way would comply with:
a) the terms of any loan agreement with any bank who has a charge over the property; and
b) any insurance policies for the property (ie public liability insurance, buildings insurance, etc).
Learning to adapt
What the pub desk concept demonstrates is the growing importance for businesses to utilise what they have and to be creative. Even with the breakthrough of Covid-19 vaccines, we are still months off from being back to where we were pre-pandemic in terms of how many people can be in an area at any one time.
It is plausible that, even after the pandemic has passed, there will still be demand for remote working spaces; people may enjoy the better work-life balance which remote working offers them or businesses may decide to permanently close their offices and continue to work remotely because of the cost savings this presents.
The pub desk could see the beginning of a permanent change in how and where people spend their working days.
Rachel Holdaway is a managing associate at Cripps Pemberton Greenish
