Originally published in May 2003
In a competitive property market landlords may have to be pragmatic about how to deal with tenants in financial difficulties struggling to pay their rents. A landlord could consider offering temporary support to a tenant by abating the rent. This may make commercial sense for a landlord; a failure to support the tenant may lead to the tenant’s insolvency and the lease being disclaimed. In a difficult economic climate, or where there is a high level of vacancies, a landlord will need to budget for a rental void period, tenant’s inducements and/or lower rents. It is a difficult equation for the landlord because rent concessions may also adversely affect the investment value of the building, but so will an insolvent or non performing tenant.
