UK: Much Ado About Cashflow

Last Updated: 11 February 2009
Article by David Earl



A large man – MR LANDLORD (do you see what we've done here?) – sits at a large desk, writing. Prominently displayed on the desk is a calendar showing the month of December. The number 25, printed in red ink, is easily visible.

LANDLORD stops writing and, very deliberately, pokes the red number 25. A peal of happy music rings out. LANDLORD laughs.

The telephone rings. LANDLORD picks up.


A Mr Tenant here to see you, Mr Landlord sir.


Right, thank you. Please send him in.

TENANT enters and sits in the chair across the desk from LANDLORD.


I won't beat about the bush. I've come about the rent.


(aside to camera)

Isn't that what I'm supposed to say?


What rent?


The rent on Unit 29, down at your shopping centre.


What about it?


I'd like to pay it monthly from now on.


(derisive laugh)

Unless I'm missing something, your lease clearly requires you to pay rent quarterly in advance. Why on earth should I agree to you paying it monthly?

(slaps head theatrically)

Hang on, I get it! This is just another shabby attempt to extend your period for payment, just as you've done with all your other suppliers – whether they liked it or not!


In case you hadn't noticed, things are pretty tough right now in the retail world. As a small independent trader, if you agree to accept my rent monthly it'll improve my cashflow and could well make the difference between my business surviving or not.

(warning smile)

If I go bust you'll get the unit back quicker than you can say 'disclaim'. It'll take you ages to re-let it and then only at a lower rent and with a rent-free period.

(waves hand dismissively)

Besides, all this paying quarterly in advance is a legacy from Olde England – you know, lords of the manor sending out vassals on horseback to collect rents four times a year at religious festivals. You need to start living in the 21st century.


(leans back)

Well, I must admit that's the first time I've heard the word 'vassal' in this office.

(leans forwar d)

Are you asking me for monthly rent payments because your business is struggling or because you have a problem, philosophically speaking, with paying rent quarterly?


Er, because the business is struggling, I s'pose. Anyway, you should regard us as being in business together. When I do well, you do well. We should look after each other.


I agree, but only once I've looked after myself.

(picks up a document from the desk)

Look, here's my loan agreement with Negobank. It says that I must collect rents quarterly in advance and pay them into a blocked account with the bank in order to secure the interest payments on my loan. I wouldn't have got the money to develop the centre otherwise. I'd love to help you but...


I can't help thinking your bank would be more bothered if some of your tenants went bust and your rental income went through the floor.


Maybe. But if I agree this with you, I'd have to agree it with all my tenants if they asked.



Then I promise not to tell anyone.


I could ask the bank, I suppose. But it would have to be confidential and it would have to be documented.


Thinking about it, you could either have a permanent variation...

(aside to camera)

That way, I'll get an uplift on the next review compared to leases where payment is quarterly – ha!


Or – if it's down to poor trading, as you say – you could have a temporary concession where payment would revert to quarterly once your turnover gets back to an agreed figure.


We are in business together after all.

(aside to camera)

And don't think I won't be looking at ways of recovering the costs of delayed payment and extra rent collections from him – ha!


Okay, I'll have a word with my solicitor and let you know.


Right, but be quick as I tend to recover swiftly from bouts of benevolence. And I'll expect you to pay my costs for documenting the change.

They stand and shake hands. CUT TO:


Another man – with the realistically double-barrelled moniker of Mr Highstreet-Multiple – has now taken the place of Mr TENANT.


So Mr Highstreet-Multiple, what can I do for you?


I won't beat about the bush. I've come about the rent.



What rent?


The rent on unit 35 – that's the big one – down at your shopping centre.



What about it?


We'd like to pay it monthly from now on.


(aside to camera)

This is like Groundhog Day, except obviously not as good.


Why on earth should I agree to that? And before you start going on about poor trading and cashflow, I should point out that you are considerably bigger and richer than me. Isn't this just another shabby unilateral attempt to extend the period for payment to your suppliers with a view to making you even richer?


Not at all. We regard the concept of quarterly payments as being completely outmoded, a legacy of Olde England, vassals straddling...


Yes, yes. Spare me the details. My answer is no...

(tone changes)

Unless you agree to a 2 per cent rental increase to compensate me for agreeing to the change?


In that case, this meeting is over. Next thing I know, you'll be wanting to talk about downward rent reviews, length of leases, service charges and so on – outrageous!


Don't think we won't remember this when our lease comes up for renewal!


(aside to camera)

I'll be long gone by then.

HIGHSTREET-MULTIPLE leaves the room in what can only be described as 'a huff'. CUT TO:


The telephone rings. LANDLORD answers.


A Mr New tenants-Agent to see you Mr Landlord, sir.

LANDLORD groans. A man enters the room without knocking.


I won't beat about the bush. I have a number of clients who would like units in your shopping centre. But they will only proceed if they can pay rent monthly.



And as they launch into a discussion about yields, caps, phasing, breaks, AGAs, and something called 'inside and outside', we...


(screenplay by senior partner David Earl)

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