workplace rental issue advice?

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  • workplace rental issue advice?
  • A friend is a business owner and rents her place.

    Her second year in business was very hard and she began to only part pay her rent for a series of months in 2015, she was fearful, and didn’t bring it to the attention of the landlords.

    They didn’t say anything either, after about 6 months of reduced paying, she thought she better tell them.

    They then did some reckoning up and told her how much she owed them in arrears. They then devised a plan that she would start paying back over and above the normal rent to eventually pay off what she owed.

    They said that this arrangement was favourable to her because her missed payments would have incurred an interest, and really she would have been paying back even more.

    They say that the one member of the landlords family covered the cost of the mispayments on her behalf (whether or not this is true or BS is unclear).

    The landlord and more recently siblings have been coming to the business semi-regularly for treatments at no cost to them, and not as part of the repayment process, (i.e. this treatment costs £40, we will take that off what you owe us) so, essentially FREE goodwill treatments, that my friend feels obliged to give because she is in their debt.

    All very messy – my friend has confronted them about this today, and they still intend on this arrangement until the debt is paid off. This sum seems to have gone up and there is some foggyness in exactly what is owed.

    I’ve told my friend to go to the CAB – the business is really cash strapped and every month is a fight to seemingly just get by, things are looking up – but this to me just stink of blackmail…

    thoughts?

    skids
    Member

    i would stop paying rent altogether, tell them to do one and wait for the can’t pay we’ll take it away guys

    agent007
    Member

    Maybe time for a rethink on her business model?

    craigxxl
    Member

    Your friend needs to get a grip on her accounts. She knows how much the rent is per month and should have records of what has been paid leaving what is outstanding. If there are any penalties or interest for late payment it will be in the contract so again can be calculated. This is what she owes.
    The treatments that have been provided need to be invoiced back to the people who have had it and no more provided until they have been settled.
    If the business model isn’t working, which it appears not to be if she cannot cover the cost of the rent then it is time to pull the plug before further debts are incurred that cannot be repaid. It is unlawful to carry on trading whilst insolvent.

    Premier Icon maccruiskeen
    Subscriber

    All very messy – my friend has confronted them about this today, and they still intend on this arrangement until the debt is paid off. This sum seems to have gone up and there is some foggyness in exactly what is owed.

    You’re pal needs to at least be clear on what she has and hasn’t paid and does or doesn’t owe. If its them moving the goalposts then that understandable there shouldn’t be ‘fogginess’ on her part. The trouble is she’s on the back foot in any negotiations as she created the situation in the first place by effectively loaning money from her landlord without discussion or permission. That means they’ve got a certain amount of freedom to make it up as they go along as well as the contract is already broken,

    If the repayments are manageable to achieve but the freebies are the part of the agreement and are troubling her then (unless its obviously untrue and theirs tumbleweed blowing about) the way out of the freebies is to say that giving the free treatments mean turning away paying customers and in turn compromises making the repayments.

    Its a question of trying to work out whether the landlords are being helpful (and just don’t realise the freebies are problematic) and giving her the leeway to keep trading or whether they’re being mendacious and exploiting the trouble she’s in and might go on doing that.

    If, after a couple of years, someone is still barely covering rent then you have to ask yourself whether its better to work your arse off for no money or do nothing for no money. But lots of businesses take a long time to establish – it took 10 years for my ribs to stop showing and I have practically no overheads. Even if she wants to press on (and its totally valid if she does – loves the work, sees a future in it and so one) then being reasonably newly established means she can probably just move premises and start again and draw a line under the relationship with the landlord. Maybe even review her model a bit – cut the services that aren’t getting uptake and concentrate on the ones that are with fewer customers in a smaller, cheaper place perhaps.

    thanks folks some good feedback, appreciated.

Viewing 6 posts - 1 through 6 (of 6 total)

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