North East Business owners urged to tackle quarter day rent payment worries
As part of Bdaily’s feature week, The Property Market, we hear from Chris Ferguson who is urging North East business owners who are worried about meeting upcoming property rental payments to proactively engage with their landlords in advance of rents slipping into arrears.
That’s the advice of Chris Ferguson, North East chair of insolvency and restructuring trade body R3, who was speaking in advance of the first Quarter Day since the end of restrictions preventing commercial landlords from issuing winding-up petitions against limited companies for unpaid rent.
As part of steps to support businesses during the pandemic, the government introduced temporary legislation that prevented landlords from trying to recover rent arrears from tenants who weren’t able to operate as normal or indeed couldn’t open their doors at all during the last two years, but this protection came to an end at the beginning of April.
The temporary winding-up petition threshold of £10,000 that the government also put in place went back to the usual £750 figure at the same time, making it easier for creditors to act to recover what they’re owed.
The latest official Insolvency Service figures showed a year-on-year rise of 79.2 per cent in the number of corporate insolvencies across England and Wales between May 2021 (1,014) and last month (1,817).
Chris Ferguson, who is head of recovery & insolvency at Gosforth-based RMT Accountants & Business Advisors, said, “the financial outlay associated with Quarter Day can have a substantial impact on cashflow, especially within the retail and service industries.
“Rent is typically one of the largest business expenses and many directors have found the amount they owe has increased where the pandemic has affected their ability to trade.
“Rather than hiding away from their problems, businesses struggling to meet their Quarter Day payments need to proactively speak to their landlords about how they manage their rental payments. Most landlords would far rather see their tenants engage with them to discuss payment issues rather than face the risk of tenants failing and being left with void units.
“Over the last two years, a number of creditors have recognised that engagement leads to better outcomes than enforcements, and landlords may be willing to listen, negotiate or compromise with a sitting tenant who is having short-term difficulties.
“Any North East business owners who are concerned about their financial position need to seek qualified advice as early as they can, so they have access to the widest possible range of restructuring options to deal with their particular situation.”
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