Adams offers a FREE Business Audit, to all new clients and a similar length initial consultation on all new cases. Find out more about the Adams Law Free Business Audit
Home / Update and Advice/ The increasing need for monthly rental payments in commercial leases
The increasing need for monthly rental payments in commercial leases
Written by: Ruhel Alom
With the economy still very fragile, commercial property tenants across the country are anxious about the next quarterly rent payments due in June. Despite the recession commercial landlords continue to collect rent quarterly rather than monthly. Large retailers have commented that such out-dated practices are leading to the end of many businesses as cash flow tightens up.
At Adams, the majority of our commercial clients would prefer to pay their rent monthly rather than quarterly. Our clients feel that monthly rental payments, especially for well-located properties whose quarterly rental payments are often in excess of £25,000, would allow them to budget more prudently for the rental payment and other outgoings. Such cash flow problems have led the British Property Federation (BPF) to offer major concessions including changing precedent leases to allow for monthly rent payments and reducing service charges for shared facilities such as lifts.
There is no easy fix for existing commercial tenants as they are already bound by leases which require quarterly rental payments. In theory, they are at the mercy of the their landlord to heed their request to accept monthly rent payments rather than quarterly, however we have negotiated with commercial landlords in the past and may be able to help you too.
The position for prospective commercial tenants is more straight-forward. Here at Adams, we can help negotiate monthly rental payments in their proposed leases. In the current economic climate, unless the property is unique, most landlords would be well advised to accept monthly rental payments rather than sitting on an empty property.
If you would like to discuss this any other property matter, please contact Ruhel Alom on 0207 790 2000 or ralom@adamslaw.co.uk.
