The government’s recent announcement that it intends to publish a code of practice imminently for commercial landlords and occupiers to adopt when discussing rental payments is certainly to be welcomed.
The fact that it will be the result of input and collaboration of industry bodies from both sides of the equation – BPF, British Retail Consortium and UK Hospitality for example – will hopefully mean it achieves its objective of facilitating ‘fair and transparent discussions between landlords and tenants, through collaboration and communication. It is vital to recognise the challenges for both sides and ensure that neither shoulders the full financial burden of the current crises.
However, those of us in the property management industry have been working to these principles for months. Discussions and negotiations that started around March quarter payments have continued in anticipation of the June quarter, as property management teams have been in constant dialogue with occupiers and landlords. With some tenants struggling to pay their rents, clients have agreed numerous rental concessions, including monthly rent and service charges, deferred rent payment plans and re-gearing of leases. This has been made possible by all parties adopting a fair and constructive approach.
With more businesses implementing social distancing plans to allow staff to return to work and non-essential retail opening this week, there is light at the end of the tunnel. Indications from our Scottish portfolio, where rent payments fell due last month, were positive. Rent collection for the June quarter will still be extremely challenging, but with more businesses open and trading before the quarter day, this should help them to make the payments due, or at least a contribution towards them.
Rarely has property management, and its core function of rent collection, attracted so many headlines. March and April saw plenty of press coverage of the difficulties of many of the UK’s leading investor landlords and we’ve known for some time that the June quarter is going to be at least as challenging. Let’s hope that the commercial understanding and empathy envisaged by the government’s Code is shown by both occupiers and landlords alike.
Howard Evans is partner and head of property management at Workman