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'Dogfight' looms as landlords start suing restaurants over unpaid rent

thisismoney.co.uk

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Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#21

Post by echelon »

SpicyLemonZest wrote: post #10
echelon wrote: post #8

Earlier quoted context omitted.

Businesses were told to close by the government to prevent spread of the virus, thus effectively shutting off their income. The government should shut off rent income, too. And mortgage payments. We're in survival mode. Nobody gets to make any money right now. We have to wait for the recovery to begin.

How are people going to obtain goods and services if they're not making any money? I suppose we could bootstrap a temporary command economy, but that seems very challenging and such economies don't have a great track record.

A few key businesses can be carved out as exceptions. It's not a hard and fast rule - we have to be pragmatic.

People can't starve. You shouldn't require businesses to pay mortgages or rent. This is where the government needs to step in and provide guidance, leadership, and subsidies.

It's pretty clear we're headed for a recession at this point. Forgiving debts could help reprime the system.

Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#22

Post by toomuchtodo »

kfrzcode wrote: post #11
FartyMcFarter wrote: post #7

Earlier quoted context omitted.

Both should be pricing in the risk. If I buy a house as an individual I'm taking some of the risk, but so is the bank that lends me money. We each have different risks (I can lose the house, the bank can lose the money if they can't make it back by selling it), which is fine.

Honest question, how does one factor in risk for a catastrophic decline in cash flow? I'd suggest having a war chest which could cover six months expenses. I'm not a business owner though... I imagine it's probably harder to do than it is for an individual.

6-12 months of cash reserves, whether you’re an individual or business. The yield drag is offset by avoiding insolvency.

Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#23

Post by pjc50 »

SpicyLemonZest wrote: post #10
echelon wrote: post #8

Earlier quoted context omitted.

Businesses were told to close by the government to prevent spread of the virus, thus effectively shutting off their income. The government should shut off rent income, too. And mortgage payments. We're in survival mode. Nobody gets to make any money right now. We have to wait for the recovery to begin.

How are people going to obtain goods and services if they're not making any money? I suppose we could bootstrap a temporary command economy, but that seems very challenging and such economies don't have a great track record.

Income from labour is shut down for some entire professions. It's time for those making their income from capital to be furloughed as well. If they have no income they are entitled to the same benefits as the restaurant staff.

Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#24

Post by matwood »

echelon wrote: post #8
dahdum wrote: post #4

Earlier quoted context omitted.

How exactly is this profiteering? They aren't demanding extra money or marking services up. They're at a high risk of bankruptcy themselves.

Businesses were told to close by the government to prevent spread of the virus, thus effectively shutting off their income. The government should shut off rent income, too. And mortgage payments. We're in survival mode. Nobody gets to make any money right now. We have to wait for the recovery to begin.

What happens to the people living on fixed income from the dividends of those bonds backed by those mortgages?

This is why I think some of the European countries have the right idea. Don't stop people from paying rent or mortgages, instead give all those who lost their jobs some percentage of their income until this is over. This lets people continue paying their bills so all of the second, third, and forth order effects keep happening.

It's like the pig farmer story out of Las Vegas. Once the strip shut down along with all the buffets, the local pig farms lost their primary source of food (buffet throwaway). Now the farmers are struggling to find enough food which may end up impacting the pork market.

Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#25

Post by jasonjei »

dahdum wrote: post #14

Government should take a hit, in my opinion. It's inefficient for every individual and entity to prepare themselves against things like this, especially since government action (stay at home orders) is exacerbating it. The business "bailouts", at least the in US, are mostly just loans anyway. Taking a "too bad" stance and letting businesses cascade fail prolongs the pain and leaves the country worse off when the cris…

We just passed the CARES Act in the US, which gives small businesses a loan about 2.5 X their average monthly payroll. It is fully forgiven if used for payroll, rent, or utilities in the first 8 weeks.

Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#26

Post by monoclechris »

aurizon wrote: post #2

Yes, they hope to sieze all assets and sell the business after the UK emerges from the pandemic. One hopes the law makers in the UK will act to block this. Like snakes, the landlord's teeth point inwards. In mitigation, the landlords may well have their own mortgages to pay, and need to establich their legal position in a timely manner under contract laws, so a full governmental solution is needed.

Please leave comments like this on reddit where they belong.

Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#27

Post by maccard »

kfrzcode wrote: post #11
FartyMcFarter wrote: post #7

Earlier quoted context omitted.

Both should be pricing in the risk. If I buy a house as an individual I'm taking some of the risk, but so is the bank that lends me money. We each have different risks (I can lose the house, the bank can lose the money if they can't make it back by selling it), which is fine.

Honest question, how does one factor in risk for a catastrophic decline in cash flow? I'd suggest having a war chest which could cover six months expenses. I'm not a business owner though... I imagine it's probably harder to do than it is for an individual.

if your war chest covers 6 months, then at what point do you start chasing the income? do you wait until 6 months are up, or do you begin the process 2-3 months in, in the hope of resolving the situation before you run out of cash?

Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#29

Post by chrischen »

FartyMcFarter wrote: post #20
dahdum wrote: post #14

Government should take a hit, in my opinion. It's inefficient for every individual and entity to prepare themselves against things like this, especially since government action (stay at home orders) is exacerbating it. The business "bailouts", at least the in US, are mostly just loans anyway. Taking a "too bad" stance and letting businesses cascade fail prolongs the pain and leaves the country worse off when the cris…

> Government should take a hit, in my opinion. Government means "everyone who pays taxes". I'm not sure that's fair. I think it's fine to spend taxes rescuing people (including the business owners if they're in personal trouble), but rescuing businesses feels like a very different story.

Businesses exist to serve people—both customers and as employers. In this case the businesses are also the ones being sued, and people only get affected because the business gets sued.

Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#30

Post by danharaj »

Over the past 40 years the West has fallen into a deep capitalist realism which completely erases the contingent nature of our economic system. Debt and property are not basic facts of reality, they require stable, predictable economic relations. Those are all out the window right now.

It may be ideologically impossible for our governments, rentiers and financial institutions to acknowledge that the suspension of daily life means the suspension of business as usual.

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