How can I avoid pop-up pitfalls?
Pop-ups can be a great, economical way for retailers to dip their toe into a new market but there are legal issues involved that many may not be aware of.
It is important for retailers to weigh up the lack of security against a pop-up’s flexibility.
“If the pop-up is a success and you have found the perfect location, you won’t have any right to occupy it after the original period,” says Helen Wheddon, head of real estate disputes at law firm Stevens & Bolton.
“Success of the pop-up may also strengthen the landlord’s hand to set a high rent if you wanted to stay longer.”
Landlords are also likely to ensure that the tenancy can be terminated if they receive any complaint or threat of enforcement action from local planners.
It is important to be prepared for any potential action by neighbouring retail tenants should they believe nearby pop-ups degrade their own standing.
“If you have the same landlord, then neighbouring tenants may take action against the landlord, if it breaches their rights under their own leases,” says Wheddon.
“What is more, if you interfere with the neighbouring businesses to such an extent that it amounts to a nuisance, they may be able to take action directly against you.”
All these factors mean that it is vital for retailers to treat their pop-up proposition as a unique offer to ensure it falls in line with the expectations of landlords and nearby businesses, as well as shoppers.
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