For many businesses, the Christmas period brings reduced trading hours, temporary closures or a full shutdown. While these decisions may make commercial sense, they often give rise to questions about ongoing lease obligations. Each year, disputes arise because tenants assume that closing for Christmas affects their rent or other liabilities. In most cases, it does not.
Understanding how commercial leases operate during seasonal closures is essential for avoiding unexpected costs, strained landlord relationships and disputes in the new year. This article sets out the key legal points businesses should review as part of a seasonal legal check.
Rent and payment obligations during Christmas closures
One of the most common misconceptions is that rent is reduced or suspended if premises are closed over Christmas. In the vast majority of commercial leases, rent remains payable in full regardless of whether the tenant is trading. Rent is a contractual obligation tied to occupation, not use.
Unless a lease contains a specific rent suspension clause, which is uncommon and usually limited to damage or insured risks, a Christmas closure will not affect the obligation to pay rent, service charge or insurance contributions. This includes periods where staff are on leave, stock is cleared out or the business is shut to the public.
Tenants should also be mindful of payment dates that fall over the holiday period. Quarter days and monthly rent dates do not move because offices are closed. Late payment may trigger interest, administration fees or even enforcement action depending on the lease terms.
From a practical perspective, businesses should plan ahead to ensure that payments are authorised and processed before key staff are unavailable. Assuming that a landlord will be flexible because it is Christmas can be a costly mistake.
Use clauses and keep open obligations
Some commercial leases include keep open clauses requiring tenants to trade during specified hours or seasons. While enforcement of these clauses can be complex and context dependent, they should not be ignored.
Retail and leisure tenants are particularly exposed to this issue. A lease may require premises to remain open during normal trading hours, which could include the Christmas period. Closing without consent could technically amount to a breach of lease, even if enforcement is unlikely in practice.
Landlords may be more willing to grant temporary consent for seasonal closures if approached early and transparently. A short written agreement or licence can reduce risk and preserve goodwill. Silence or assumption, on the other hand, can store up problems for later.
Tenants should also consider any requirements relating to display, signage or presentation of the premises. Leaving units empty or visibly closed for extended periods may breach obligations to keep premises in a certain condition or standard.
Service charges, insurance and other ongoing liabilities
Even when premises are closed, service charge and insurance obligations usually continue. These costs relate to the maintenance and protection of the building as a whole and are not dependent on individual use.
During Christmas shutdowns, issues sometimes arise where services are reduced but charges remain unchanged. While this can feel unfair, service charge provisions are driven by the lease wording rather than seasonal usage. Challenging charges requires careful analysis of the service charge mechanism and supporting documentation.
Insurance obligations also remain critical. Some leases require tenants to notify landlords if premises are left unoccupied for a certain period. Failure to do so may invalidate cover or expose the tenant to liability if damage occurs during closure.
Businesses should check whether additional security or precautions are required during periods of non occupation. These obligations are often overlooked but can have serious consequences if something goes wrong.
A short legal review before Christmas can prevent disputes in January. Businesses should start by reviewing their lease carefully, focusing on rent payment dates, use clauses, keep open provisions and insurance requirements.
Communication is key. If a business intends to close or materially reduce trading hours, notifying the landlord in advance is often sensible, even if formal consent is not strictly required. This can help manage expectations and avoid unnecessary friction.
Internally, businesses should ensure that finance teams are aware of holiday payment deadlines and that authority levels are in place to avoid late payments. Where cashflow is tight, early dialogue with landlords is generally more effective than silence.
Finally, tenants should use the seasonal pause as an opportunity to review longer term lease strategy. Issues such as rent reviews, break options and dilapidations often benefit from early planning rather than last minute reaction.
Conclusion and next steps
Christmas closures may be temporary, but the legal consequences of misunderstandings around lease obligations can last much longer. Commercial leases rarely pause for the festive season, and businesses that assume otherwise risk unnecessary cost and dispute.
Taking a proactive and informed approach allows businesses to enjoy the benefits of a seasonal slowdown without legal headaches in the new year.
If you are unsure how your lease operates during Christmas closures or want advice on managing commercial property risk more generally, Penerley’s commercial property solicitors can help. We advise businesses across a range of sectors on lease interpretation, landlord negotiations and dispute avoidance. Contact us today to arrange a review and start the new year with confidence.
