Landlords should be more flexible on rents

Dec 22 2009 by Karen Dent, The Journal

FEW landlords have allowed shopkeepers to switch to paying their rents on a monthly basis and the majority have remained with the traditional quarterly upfront payments, despite the difficulties caused by the recession.

One in eight retailers quizzed by the British Retail Consortium (BRC) said they had been allowed to change their payment options, but 90% of those said they had been or would be penalised with higher charges for altering their rental patterns.

However, there was more flexibility for retailers who had taken on new rental leases since January last year, with around two-thirds of agreements including monthly payment terms.

The BRC has been campaigning since before the economic downturn for landlords to abandon what it calls the “archaic” practice of rent payments being made upfront for the coming quarter. The quarter days coincide with religious festivals and the next payment is due on Christmas Day.

Stephen Robertson, British Retail Consortium director general, said: “It’s been a tough year with many thousands of shops falling vacant. Helping out before that happens is in the interests of both landlords and retailers.

“Thanks to the BRC’s campaigning, good progress has been made in establishing monthly rental terms as the norm on new leases. But landlords are frequently failing to offer the same flexibility on existing leases. Even when they do, some are slapping on extra charges.

“Demanding to be paid three months in advance belongs to a bygone era when horseback was the quickest form of communication. It has no place in our modern world of email and online banking.”