THE ROW between retailers and landlords over the payment of rent 12 weeks in advance could hit a new peak later this month when some occupiers will refuse to write a cheque to cover the next quarter.

Instead, some retailers are considering whether to write three cheques, one to cover the first month and another two postdated to cover the subsequent months.

Such action would demonstrate the deep frustration that retailers feel with their landlords. It could also trigger a wave of legal action from property owners.

Some of the biggest names in retailing have joined forces with Sir Philip Green of Arcadia and BHS and Lord Harris of Carpetright to demand that landlords drop their demand for quarterly rents to be paid in advance. The lineup includes Alliance Boots, Next, Argos, Carphone Warehouse, Debenhams and HMV. Green and Harris have also won the support of the British Retail Consortium (BRC).

At a meeting last week with the British Property Federation, the BRC suggested that while the retail industry remains in challenging times, landlords should accept monthly payments for the next two years.

This suggestion was not welcomed by Francis Salway, chief executive of Land Securities, the property company, and chairman of the federation.

A further meeting will be held this week between the two sides but so far the property industry shows little sign of agreeing to the demands.

The next quarter day falls on September 29 and is likely to be accompanied by several smaller retailers going to the wall. The upfront payment of rent has a huge impact on retailers’ cash flow.

It is not just property companies that are resisting the demands, but also pension funds such as Prudential and Legal & General which own some of the largest shopping centres.

One reason these institutions are attracted to the sector is because of the certainty of the rental income.

They are concerned that reducing demands on occupiers could have an impact on the value of their buildings.

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