The British Retail Consortium is arming its members with a template letter to send to their landlords over monthly rents, just a week before the next payments are due.
It has given retailers the letter ahead of the next quarterly payment day on 25 December.
The BRC worked with legal advisors to produce a draft deed that provides a legally binding agreement for changes in payment terms.
The letter is the latest stage in the BRC’s three year campaign to end what it calls the ‘ancient and unjustifiable’ practice of requiring rents to be paid quarterly in advance. It wants flexibility to change from this practice to monthly rents, even on existing leases.
BRC director general Stephen Robertson said: ‘The BRC has made significant progress in establishing monthly rents as the norm but today’s tough trading conditions mean the impact of paying three months in advance is that much greater.
‘Seeing retailers driven to the wall is in no-one’s interest. By agreeing to a fairer rents regime, landlords will be contributing to the retail prosperity on which they themselves depend.
‘With these draft letters, we are offering the BRC’s help to all retailers, but especially those who are unlikely to have the expertise or time to tackle landlords over making this change.’
The letter says: ‘Over the past year we have seen several very well-known retailers, and many smaller businesses, disappear from the high street due to adverse trading conditions resulting from serious cost inflation (labour, rent, rates and utilities) eroding margins and of course the impact of severe contractions in the credit markets.
‘One very helpful change which, you could initiate would be to move our payment terms in our existing leases from quarterly in advance to monthly payments in advance. I believe this move is in line with modern business practices, having been accepted as best practice on the majority of new leases and would make cash flow management significantly easier.’
No comments yet