Twitter is being sued by landlords in San Francisco and London after failing to pay rent on its offices, as new owner Elon Musk takes on extreme cost-cutting strategies that reportedly include simply not paying the bills.
The crown estate in London, which manages property belonging to King Charles III, filed a claim against Twitter in the high court in the UK capital last week. The alleged rental arrears relate to office space near Piccadilly Circus in central London, according to the BBC.
The owner of Twitter’s San Francisco headquarters has also sued Twitter after it failed to make its latest monthly rent payment for January, amounting to $3.4m, according to documents filed on Friday with the superior court of California.
This comes after a report earlier this month stated that Twitter owed $136,260 in overdue rent on a separate office in San Francisco and was facing a lawsuit. Also in January, workers at a Twitter office in Singapore were evicted due to unpaid rent on the building.
Twitter did not immediately respond to a request for comment.
The actions came only a few months after Twitter was taken over by Elon Musk, the co-owner of Tesla and SpaceX, in October last year. Musk paid $44bn (£36bn) for the platform and quickly initiated sweeping job cuts to the firm’s 7,000-strong workforce – cutting it by 50%.
Musk’s takeover has not been without issues, including a chaotic relaunch of the blue tick scheme for verified users that led to a number of impersonator accounts and advertisers withdrawing from the platform over concerns about a rise in hate speech.
The social media company was reportedly hit by a 40% drop in revenue after more than 500 clients paused their spending, with high-profile brands such as Audi and Pfizer halting advertising.
The BBC reported that the crown estate took legal action after previously contacting the social media company about the alleged rental arrears at its office space.
John Wallace, a solicitor and director at the London-based law firm Ridgemont, said the hearing between the crown estate and Twitter was likely to take place in the next six months and warned that the UK’s struggling economy could lead to an increase in rent arrears claims.
He said: “The receding of the UK’s economy will inevitably lead to commercial landlords having to take action against non-paying tenants.
“I would expect to see a sharp rise in commercial rent arrears claims in second and third quarters of 2023, given the Office for Budget Responsibility’s prediction that a recession will last until at least autumn 2023.”
The estate is one of the largest landowners in the UK, and although the portfolio belongs to the monarch, it is not private property.
The revenue from the estate goes to the Treasury for public spending and in return the monarch receives the sovereign grant.
Musk’s property woes are just the latest legal headache for the billionaire, who has been testifying in recent days in a separate class-action lawsuit from Tesla investors alleging his 2017 tweet misled them about funding to take the electric carmaker private.
The Associated Press contributed reporting