Rent demand tactics by retailers may be illegal, says BPF
While happy to help those in need, the BPF stressed surprise that some of nation’s better placed retailers were opportunistically and unilaterally trying to renegotiate terms of leases that they have signed.
Responding to reports that more than 20 high street chains are penning an open letter to landlords demanding monthly rents, the BPF said that landlords would be happy to negotiate with tenants who were in genuine need, but warned that coordinated letter writing to individual landlords may prove illegal.
Due to their popularity with retailers monthly rents are increasingly being offered by landlords on new leases. However, changing the payment terms on an existing lease can cost landlords money, so is generally only agreed where a retailer has genuine cash flow difficulties.
Friday’s Property Week reported that retailers including Comet, B&Q, New Look and Next were all signatories to the letter, which is being coordinated by the Property Managers Association.
Ian Fletcher, director of policy at the British Property Federation, said: “I am sure there are no cartel-like activities in this example, but it is worth remembering that it is just as illegal for buyers to fix the terms on which they buy as it is for sellers to fix the terms under which they sell.
“Monthly rents are relatively common on new leases and I know landlords will look sympathetically at individual cases involving existing leases on a case by case basis, and provide help where the need and benefit is demonstrable.”
“What we find disappointing is that some of the nation’s largest retailers – who are not in trouble and mainly owned by private equity firms – seem to want to use their muscle to rewrite business terms for their own profit and to the detriment, ultimately, of pensioners’ investments in property.”
