Landlords are in the news. But then landlords are in the news more often than Huw Edwards and Emily Maitlis. With this in mind we stretch our memories back to the Joint Board Corporate Insolvency paper of last November in which there was a question on the British Property Federation that freaked out a number of students, even though it was pretty straightforward, was only worth six marks and the pass mark is just 45%.
Landlords and leases have dominated the news ever since, so doh! There is also a very good piece on retail tenants splashed over the press today (Friday 1 October), so fail to read this at your peril. Re-Leased do not just have a hilarious and ironic name, they track more than 35,000 commercial leases and publish information about them that is worth knowing. Today they report 11 per cent of the rent due from retailers was paid by Wednesday’s quarter rent day. That figure compares with 14 per cent collected on the previous quarter rent day in June. To offer you pan ... blah, blah, blah perspective in September of last year, landlords received 13 per cent of rent owed on time. Shocking.
It's possible landlords just need training on assertiveness and negotiation. It's also possible that either tenants cannot afford to pay, or have got so used to not paying and getting away with it that they are chancing their arms.
To offer you further perspective, even before we had heard of Wuhan landlords only received about 30 per cent of their rent by the appointed day. The fact is that people just don't like to pay their rent promptly, and industry sources pointed out that the number that don’t is likely to rise over the coming days as tenants belatedly clear their liabilities. So Tom Wallace, Chief Executive Officer of Re-Leased, how do landlords respond to this level of relative inactivity?
"Disappointed", responded Tom to that question. Maybe that gives us a futher clue. Landlords just aren't pursuing their legal rights with the passion and fury of an erstwhile 17 year old American woman who claims she was allegedly sexually assaulted by our least favourite royal last month. Come on, Tom, we need a little more than that.
“Well, with the furlough scheme coming to an end but the moratorium on evictions still in place, occupiers may be looking at how they can balance the books, and withholding rent could be the answer. Many will be making tough decisions, and staff wages will be prioritised to keep businesses open.”
Office owners have so far collected 24 per cent of the rent owed to them and warehouse tenants have paid 23 per cent of their rents. Overall, 19 per cent of commercial rent due on Wednesday has been paid, a slight improvement on the 18 per cent paid on time on June’s quarterly rent date.
Rubbish for landlords, but bliss for JIEB students if they could quote some of these numbers and say something sensible (but short and sweet) about them on 9 November.