Monthly rent payments- the Landlord's perspective

In my case note on MK Airlines v Katz I suggested that monthly rents (as opposed to quarterly rents) would help Landlords and Tenants. From the Landlord's perspective s/he would only have to wait a month (instead of three) if the business is put into administration immediately after a quarter day (as has been the practice since Goldacre). Monthly rents would also assist Tenants with their cashflow- particularly in the retail sector.

The quarterly rent payments date back to medieval times. They fall on the Christian Holy days- the days when, historically, the King appointed his servants and rates were due. Many Tenants have demanded a change to this archaic practice. Some big Institutional Landlords (such as The Crown Estate, British Land, Lend Lease etc) have already made the switch to monthly rents. However, the practice of quarterly rents does still exist and is being used by Landlords. The case for quarterly rents is:

• Landlords owe duties to other persons/ bodies such as lenders and pension funds. A Landlord may have a mortgage with a lender. The lender may not be willing to tolerate a change from quarterly to monthly rents.
• If the Landlord does accept monthly rents then they will be liable for extra administration fees and bank charges. This will then be passed onto the Tenant through the service charge- another expense for the Tenant!
• Quarterly rents have existed and worked for centuries.

The practice of quarterly rents will raise strong passions from both sides of the divide. My opinion? quarterly rents are archaic. Many smaller Tenants are struggling- depressed economic growth, 2.7% inflation eating into wages. Landlords must decide- do they want quarterly rents or a Tenant. A Tenant may well be advised to look for a better Lease if quarterly rent payments are not forthcoming. That is something that the Landlord and their Lawyers may want to bear in mind during Lease negotiations.

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