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Retailers revolt as landlords breach rental agreements

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The availability of monthly rental agreements is causing a wide-spread rift between business owners and landlords, despite an agreement for greater co-operation just over a year ago.

As the Christmas season reached its climax, UK retailers will be ready to put a tough year behind them and hope for a promising end to the decade. But constant squabbling with landlords looks set to tarnish the New Year as unwarranted fees begin to mount.

According to the British Retail Consortium (BRC), a mere 12% of retailers are on monthly rental agreements, with almost 90% being charged for switching from quarterly payments. Of those retailers that could adapt their agreements, 40% claim they were only given the option for a limited period.

The unpredictable nature of the country’s economy means that varying retail profits can no longer guarantee rental payments. Retailers believe monthly rents should become universal to combat the revenue frailties but feel that the three months advance that must be handed to landlords “belongs to a bygone era”.

“One-in-eight leases on monthly terms is shameful,” said Stephen Robertson, BRC Director General. “Landlords should offer monthly rental payments on all leases where retailers ask.”

Property companies have told retailers they are increasing flexibility on rental agreements, but have claimed some businesses are using the economy as an excuse to alter their contracts when quarterly payments are affordable.

The British Property Federation (BPF) has also disputed the BRC’s figures, claiming that interviewing just 19 medium to large retailers does not constitute a survey.

Liz Peace, BPF’s Chief Executive, said: “What this recession has shown is that where landlords and occupiers are willing to engage in dialogue the best results can be achieved and it is disappointing therefore when one side acts unilaterally like this.”

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Written by Andrew Hodges

December 29, 2009 at 4:44 pm

Posted in Comment, LinkedIn

Tagged with , , ,

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