Twitter is at odds with yet another landlord: King Charles III.
The Crown Estate, which manages the British monarch’s massive real estate portfolio, has sued Twitter over unpaid rent for office space in London. The complaint was lodged with the High Court in the British capital last week.
The case joins a series of rent disputes that are sweeping Twitter. In December, the company had Reportedly not paid rent for one of its global offices for weeks. Since then, landlords have moved in San Francisco, Seattleand London have all sued the bird app, while employees of a Twitter office in Singapore were briefly evicted from their homes for late payments.
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The skirmishes come as Elon Musk takes drastic measures to cut costs at Twitter he bought in October for a ruinous $44 billion. His other actions include firing half the staff, disconnect servers that keep the platform running, a chaotic launch of a subscription service, and, err, selling kitchen appliances.
The rental charges
It is believed that the rent evasion was an attempt to negotiate better terms. In the London building, however, this doesn’t seem to be the plan.
Since the space is reportedly abandoned and empty, it doesn’t look like Twitter will reoccupy the office. Still, this doesn’t mean Musk will get off unscathed.
“Twitter remains liable.
Andrew Conway, senior director and leading real estate lawyer in a London firm Lawrence Stephenstold TNW that it is difficult to escape his obligations.
“Unless the landlord breaks the lease (i.e. takes back the property so it can be re-rented to other tenants) or agrees to accept a formal surrender of the lease, Twitter remains liable to pay the rent for the remainder of the rental period. the term of the lease,” Conway said via email.
If the lease is forfeited or surrendered, the tenant is only liable for payments up to the date this occurs. That may appeal to Musk, but it could give the Crown Estate a headache.
If the house cannot be rented out again quickly, the landlord has a number of problems.
“A landlord is left with an empty building on which he has to pay business rates after three months,” says Conway. “In addition, empty buildings are more susceptible to occupation by squatters.”
Court proceedings offer a way to recover back rent — and Twitter will have little defense against paying it.
The collection agencies are coming
Musk’s growing feuds with landlords coincide with growing financial pressures on Twitter.
The first interest payment on the $13 billion in debt used for his acquisition could be paid by the end of January, he said. the Financial Times. Analysts expect the looming bill to be around $300 million.
Twitter’s revenues have also plummeted. Research suggests that ad spend the platform — the source of about 90% of its revenue in 2021 — fell 71% in December.
Skipping rent may defer some costs, but it adds another dent to Musk’s floundering reputation. It is also a blow to his dream end of remote working.
At least the surviving staff of the Twitter base in New York can still go to the office. Unfortunately, it stinks of poop and has a cockroach problem.
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