The demise of Comet is the latest major High Street change wrought by the downturn.
The electrical retailer, which had been a prominent fixture in towns and cities across the country, went bust earlier this month, and the future of its stores remains unclear.
Quite rightly, the most immediate concern has been over the job losses that could result. But Comet’s failure has lessons for all business owners – and, indeed, for landlords.
Comet’s commercial landlords have criticised the private equity firm that owns the retailer, claiming that they were not informed about key financial information when the electrical giant was trying to negotiate a rent reduction. Some have told national newspapers that they were reticent to grant concessions after the private equity firm refused to open the retailer’s books. At this point, some became convinced that their business plan was unworkable.
These experiences are applicable to residential landlords as well. There are three major lessons for landlords to draw from the Comet story.
You can help to head off financial problems by ensuring that you remain approachable. If your tenants feel that they can get in touch, they are less likely to bury the heads in the sand and ignore looming issues. It is always better to address problems as early as possible, before they escalate.
Be ready to negotiate
A good landlord is a good negotiator. As well as being approachable, you need to be willing to consider your tenants’ situation, and to work to a mutually acceptable conclusion. As Comet’s landlords have shown, though, it is vital that you ensure you have all the relevant information during these discussions.
Finally, it is vital that you remember the importance of referencing. By seeking comprehensive information before you sign a tenancy, you can help to ensure that you only deal with those who have the ability to pay.
Read more on tackling tenant financial difficulty.