Twitter has fallen out with another landlord: King Charles III.
The Crown Estate, which manages the British monarch’s vast property portfolio, has sued Twitter over unpaid rent for office space in London. The lawsuit was filed with the High Court in the British capital last week.
The case joins a series of rent disputes that are engulfing Twitter. In December, the company allegedly hasn’t paid rent for any of its global offices for “weeks”. Since then, landlords have been in san francisco, Seattleand London have all sued the Vogel app, while employees at a Twitter office in Singapore were briefly evicted over late payments.
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The clashes come as Elon Musk takes drastic steps to cut costs at Twitter he bought in october for a ruinous $44 billion. His other actions include laying off half of the workforce, Disconnect from servers who keep the platform running, a messy start of a subscription service and, um, Sale of kitchen appliances.
The rent costs
The rent evasion was suspected as an attempt to negotiate better conditions. In the London building, however, that doesn’t appear to be the plan.
As the room has reportedly been abandoned and emptied, it doesn’t appear that Twitter will reoccupy the office. That doesn’t mean Musk gets away with it, though.
“Twitter remains subject to payment.
Andrew Conway, senior director and lead litigator specializing in property law at a London law firm Laurence StephensTNW said it was difficult to escape from its commitments.
“If the landlord fails to give up the lease (i.e., take back the premises so it can be re-leased to other tenants) or agree to a formal return of the lease, Twitter remains obligated to pay the rent for the remainder of the term of the lease,” Conway said by email.
In the event of expiry or surrender of the rental agreement, the tenant is only liable for payments up to the time of entry. Musk might like that, but it could give the crown estate a headache.
If the property cannot be rented out again quickly, landlords face several problems.
“A landlord is left with empty premises to pay business fees for after three months,” Conway said. “Also, empty premises are more prone to occupation by squatters.”
Lawsuits offer a way to collect rent arrears — and Twitter will have little resistance to paying them.
The debt collectors are coming
Musk’s escalating feuds with landlords coincide with growing financial pressures on Twitter.
The first interest payment on the $13 billion in debt used to fund his acquisition could be due by the end of January the Financial Times. Analysts expect the looming bill to be around $300 million.
Sales on Twitter have also collapsed. search suggestions that ad spending up The platform — the source of about 90% of its revenue in 2021 — fell 71% in December.
Skipping the rent might delay some expenses, but it adds another dent to Musk’s faltering reputation. It’s also a blow to his dream quit remote work.
At least surviving employees of the Twitter base in New York can still go to the office. Sadly it is smells like feces and has a cockroach problem.