Too few business leases allow monthly payments
Only one in eight leases give businesses the opportunity to pay on a monthly rather than a quarterly basis, a leading retail group has claimed.
According to the British Retail Consortium (BRC), a snapshot survey of rental arrangements found that just 12 per cent of retail property leases are on monthly terms, despite the need for greater flexibility during the recession.
Of those respondents who had been permitted to switch to monthly rather than quarterly payments, 90 per cent reported that they have been or will be hit with higher charges.
Four out of ten said that they had been allowed to change their rental payment arrangements only on a temporary basis, usually a year.
Since January 2008, two-thirds of new leases have included monthly terms, the BRC said, but added that more should be done to modernise the terms and conditions of existing leases.
Stephen Robertson, the BRC’s director general, commented: “It’s been a tough year with many thousands of shops falling vacant. Helping out before that happens is in the interests of both landlords and retailers.
“Good progress has been made in establishing monthly rental terms as the norm on new leases. But landlords are frequently failing to offer the same flexibility on existing leases. Even when they do, some are slapping on extra charges.
“Demanding to be paid three months in advance belongs to a bygone era when horseback was the quickest form of communication. It has no place in our modern world of email and online banking. One in eight leases on monthly terms is shameful. Landlords should offer monthly rental terms on all leases where retailers ask for it.”