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Landlords with multiple occupied properties have never had to consider what they need to do when their properties remain unoccupied for long periods, as they are likely to be now.
Due to the pandemic, the majority of retail, hospitality and leisure businesses were closed, either in part or completely, during 2020 and the first quarter of 2021. Many business owners have been forced to continue to pay rent for their premises despite seeing their income disappear. Landlords too have seen their rental income slashed, and it’s estimated that billions are owed in unpaid rent due to the pandemic.
With business owners desperate to find ways to manage their dwindling funds, many are looking to their landlords for financial relief in the form of rent reductions or rent holidays. Unfortunately, and somewhat unfairly, this serves only to increase financial pressure on landlords.
Where landlords were previously able to engage recovery agents to evict tenants with rent arrears, the Government’s ruling to temporarily disallow this may have helped the tenants keep their premises, despite many continuing to struggle financially.
Perhaps the solution is for both parties to adopt a longer-term, positive view by reaching a mutually beneficial agreement in the form of reduced rent payments in return for committing to a longer lease.
Are landlords willing to make a financial agreement with tenants?
Retail and hospitality have been hit hard.
Charlotte Heyes, Managing Director of Common and Co and owner of a chain of pubs in Manchester, shared her experience of negotiating with landlords during the first lockdown. She explained how some landlords were more understanding than others and were quick to put together an offer beneficial to both sides. She would still pay rent, but at a discounted rate.
Charlotte said, “Those landlords see the importance of having good long-term tenants.” Other landlords wouldn’t offer any discounts. She explained that it’s not possible to pay full rent with no income and was forced to use her savings.
Charlotte also said, “We are fighting hard to get through this with hope that there will be a boom for the need to go out and have social interactions after lockdown.”
If a landlord is unwilling to make a financial arrangement with a business owner who is struggling to afford rent, eviction may be an option further down the line, but introduces the challenge of finding a new tenant.
Empty retail units and high street shops are targets for squatters, vandals and arsonists.
With more and more commercial properties becoming vacant, landlords face increasing pressure to ensure their properties remain compliant with the requirements of commercial property insurance. Allowing their properties to remain unsecured is the mistake many landlords make, something they discover only when the need to make a claim arises.
Securing a property’s access points with steel screens and keyless doors will substantially reduce the risk of vandalism, break-ins, arson attacks and unauthorised activity.
Additional security measures to consider for greater protection may include intruder alarms, video verified alarms, CCTV cameras and solar CCTV towers, or the physical presence of a security guard or dog patrol.
The above precautions will help ensure your vacant properties remain secure and safe, helping to prevent unauthorised entry.