Post ‘Credit Crunch’, did the ecomony fully recover? How is so called Brexit already impacting on the commercial property market? Is Brexit the basis of an excuse to withhold rent?
Marketing Stockport spoke to Nigel Blyth, Director of Fairhurst Estates to gauge his opinion.
Nigel has extensive experience as a Property Asset Manager with a track record of adding value to clients property interests in addition to undertaking property acquisitions and disposals throughout the UK.
“Whilst commercial landlords should never forget that their tenants have entered into a legally binding and enforceable legal contract to pay rent on agreed terms set out within a lease or licence agreement, effective rent collection requires more strategy than ever before in these uncertain times.
“Push too hard and you may lose your tenant and find yourself liable for 100% empty rates; don’t push hard enough and your tenant may be taking advantage of the economic situation and maximising his own cash flow at your expense”.
Nigel believes that rent collection does not necessarily need to be adversarial; it’s about building relationships with tenants but being forceful when required: “If managed properly, a good landlord and tenant relationship can help keep tenants and encourage them to renew or even re-gear leases which can derive wider benefits for property owners and landlords.
“Whilst the effects of the Brexit vote seem only to be reflected in perception and confidence the reality is that nothing has fundamentally changed with Government saying now they will not invoke the infamous Article 50 of the Lisbon Treaty until 2017”.
So is the uncertainty of Brexit a good excuse perhaps for tenants to withhold rent or to claim hardship?
“In the context of the current challenging economic circumstances, being on top of your rent collection has never been more important.
“In a market characterised by requests for ever extending payment terms, limited liquidity and squeezed cashflows, it is essential that rental collection is effective, efficient and robust enough to maximise your income returns. Collection must be ethical and within the realms of the ever changing law applying to both commercial and residential property in England/Wales and Scotland.
“Collecting rent is more than just a credit control function. The law is complex and there can be many pitfalls to those that are inexperienced – it is not always the right thing to do to accept any cheque or payment that is made to you – the short term gain can be far outweighed by longer term trouble and taking the right advice is of paramount importance??”.