Landlords have been left at the mercy of their tenants

COMMENT Our small family trust consists of mixed-used assets including hotels, commercial space and residential units, which we have developed and managed over 30 years. After reading the results of the government’s consultation into unwinding the commercial eviction moratorium, it strikes me the current temporary system is fundamentally flawed.  The current government policy has sought to dispose of the Landlord and Tenant Act, which has guided relationships between landlords and tenants in an equitable and fair way.  How can a negotiation or mediation be taken equally as seriously by both parties – as is essential with any negotiation or compromise – if the power is weighted exclusively to one party? Such inequity can never bring about a fair and balanced outcome. Lack of support On one hand, you have tenants that have clearly been negatively affected by the enforced closure of the space they negotiated in good faith with their landlords. Government decisions have forced customers to be frightened away from the high street and commercial premises across the board and concentrate their requirements on essential goods and services via online platforms – a situation that could never have been predicted. To compensate for these unique and unprecedented circumstances, tenants have been supported by a raft of measures such as business rates relief, bounce back loans, grants and the furlough scheme to name but a few. All such support has been covered by British taxpayers – not only the general public and tenants, but also landlords and property companies. In contrast, landlords have had no such support but have been provided guidance, despite also being private businesses, to negotiate with tenants. Landlords have not even been afforded the business rates relief for units that are un-lettable while government imposed lockdown after lockdown. Furthermore, these negotiations have taken a sinister turn in that landlords have had their arms tied behind their backs with a moratorium on evictions, irrespective of individual circumstances, which has been further exacerbated by the court system entering a state of paralysis due to a backlog of cases created by lockdowns.  In normal times, and assuming a free and fair economy, the landlord would only utilise the option to take back possession of the asset when all else failed. What is the option in such circumstances now? As any landlord or business owner will testify, the decision to issue possession proceedings is never taken lightly, as negotiating and agreeing a lease is an expensive and time-consuming process. However, it is fundamental for any business to have the opportunity to monetise their assets, a right currently not available to landlords barring at the tenant’s gift. Imagine supermarkets being forced to not charge for their products if a customer simply stated they were in a difficult financial situation. Firstly, the police would be called and the customer arrested, followed by the economy and supply chains simply falling apart.  What makes the property industry any different than a supermarket business? Both are businesses that benefit the general public, employ thousands and pay taxes. The property industry is a key element of a properly functioning society providing quality built environments, homes, leisure and contributing hugely to the country’s tax income. The only difference is how the industry has been treated by these temporary government measures. A fate worse than debt Landlords have been left at the mercy of their tenants, and many have abused the measures for their own financial gain under the premise that these have been introduced to preserve viable businesses and employment.  But what about landlords and property companies that were viable businesses, which also employ staff as well as drive the associated construction and services industry? If there is no route to enforcing legally owed rent and the tenant does not feel obliged to make any payments until such time that normality resumes, what is the fate of the property industry as a viable business and the thousands of skilled staff working therein? There is always much talk from politicians about improving the built environment with little or no support for the property industry, which is best placed to deliver the same. The current proposals are simply scandalous and will drive quality operators away from the industry and make the economy, the built environment and country a far worse place. Metin Gurpinar, director, Dalesford Estates Image © Stock Connection/REX/Shutterstock