Federation reminds retailers that coordinated campaigns are illegal.
The British Property Federation (BPF) has warned retailers that any coordinated campaign to force landlords to accept having rent paid monthly rather than quarterly could be illegal under competition law.
Responding to reports that more than 20 high street chains are penning an open letter to landlords demanding monthly rents, the BPF said that landlords would be happy to negotiate with tenants who were in genuine need, but warned that coordinated letter writing to individual landlords may prove illegal.
Quarterly rents on retail properties have often been described as archaic and it is suggested by retailers that they put unnecessary financial pressure on retailers.
The BPF said that while some landlords are working towards offering monthly rents, changing the payment terms on an existing lease can cost landlords money, so the transition mid-lease is generally only agreed where a retailer has genuine cashflow difficulties.
Today’s Property Week reported that retailers including Comet, B&Q, New Look and Next were all signatories to the letter, which is being coordinated by the Property Managers Association.
BPF director of policy Ian Fletcher said: “I am sure there are no cartel-like activities in this example, but it is worth remembering that it is just as illegal for buyers to fix the terms on which they buy as it is for sellers to fix the terms under which they sell.
“Monthly rents are relatively common on new leases and I know landlords will look sympathetically at individual cases involving existing leases on a case by case basis, and provide help where the need and benefit is demonstrable.”
“What we find disappointing is that some of the nation’s largest retailers – who are not in trouble and mainly owned by private equity firms – seem to want to use their muscle to rewrite business terms for their own profit and to the detriment, ultimately, of pensioners’ investments in property.”