Landlords Put the Boot into Boots

British high street giant Boots is being sued by three commercial landlords for unpaid rent over multiple locations, as the grim economic fallout of lockdown looms ever larger. Commerz Investmentgesellschaft mbH, Westfield Stratford City Shopping Centre and Royal London Mutual Insurance Society are claiming a total of £3,806k, excluding interest.

Several other household names are facing similar claims, including Hugo Boss, Urban Outfitters, Pret A Manger, Sports Direct, New Look and Mecca Bingo. Under Section 82 of the Coronavirus Act 2020 landlords cannot evict commercial tenants before the end of the year, yet that has not stopped them from suing when they are owed rent.  

As an essential retailer, Boots has remained open, yet as shoppers deserted the streets and transport hubs, its sales fell by 48% during the first lockdown. Many of the non-essential outlets that have been forced to close completely have refused to pay their bills, and Boots claims it is in a similar position.

Presumably, none of the leases contains a force majeure clause permitting non-payment, thus on the face of it these are simple breach of contract claims. It is worth wondering how the arguments will go in court, more so, which cost will be greater – the rent arrears or the legal bills.

Cases like this are likely to multiply as Covid-19 continues to distress the market and production lines. Historic data gathered and analysed by the Solomonic app, suggests that should the parties seek to proceed to trial, they have a slightly better than even chance of succeeding against Boots, with 57% of these claims winning in the past 7 years.