26 May 2022

Opinion from Adrian Leopard & Co

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Anxiety continues as end of rent moratorium looms
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Anxiety continues as end of rent moratorium looms

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You do not want to be a commercial rent payer just now

I know we have a lot to say about the hospitality industry but there is no doubt that this sector of the economy has been left holding the heavy end of the coffin.

Having to spend much of the last year or so closed, one would like to think that re-opening will herald a new day and enable the poor hospitality folk to get up, dust themselves down and get their businesses running again. Oh were it that easy!

It is quite shocking how so many businesses have not re-opened and will not be re-opening when inside service commences later this month – we hope! But many of those who do will still have to face a further big issue unless government finds a way of sorting it out. The issue of course is paying their landlords the accumulated rent bill for the past year.

Rent for business has never been cheap; landlords always feel that they are hard done by and want to ensure they get the best possible return for their premises. Lessees and tenants of course do their best to pay these demands but then wonder why there is not so much left in the pot for their own labours. It is a very unfair system. People who are forced into renting are at a serious disadvantage. The people who buy their premises have been able to get mortgage holidays from their lenders and those who own their own, well they have just not made as much profit but their outgoings have been limited to maintaining their properties. They of course are in the strongest position.

Is there actually an answer which will suit all? Why should a landlord have to take less money for his premises just because it is in the hospitality industry? Why in fact should a landlord have to wait for his rent until the sector starts to work again when perhaps he could get a new tenant for a different use immediately?

On the other side of the coin why should a tenant lose his livelihood completely because he landlord wants his money or wants him out? There is nothing fair here.

Australia came up with an idea – landlords forced to make reductions in their rents commensurate with the income of their tenants. It is not an ideal situation but it at least goes some of the way to bringing some relief to tenants whilst at the same time bringing some level of cash to landlords and making them suffer some of the pain. We all know that a pandemic brings pain, often indiscriminately and there is little one can do to make things “fair”.

The present moratorium ends on 30th June. At the moment no one knows if it will be extended or whether some other form of relief may be introduced. What is known is that if on 1st July all hell is let loose it will be quite cataclysmic for the hospitality sector and innumerable more businesses may go bust as a result.

And it is not just businesses; it is estimated that if action is not taken a third of a million people could be in line to lose their jobs with all the domino effect that that brings.

It is going to be a while before people can relax in the hospitality sector.

Adrian Leopard 05-05-21

Photo Jon Tyson

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Adrian Leopard & Company is the trading name of Alderney Offshore Ltd, a company registered in Alderney, Channel Islands number 1220.

Address P O Box 1027, Alderney GY9 3AS

Registered Office Seldomin, Longis Road, Alderney GY9 3YB.

Adrian Leopard & Co is represented in the UK by 3CL (UK) Ltd trading as Adrian Leopard Associates.

Telephone enquiries may be made on 08449-4-08449 or 01684-230360.

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