Rent Review

  

 

The law concerning rent reviews is extremely complex and a multitude of cases over the last half century have modified the law to the extent that in many cases the wording of older leases is overridden by case law. For this reason tenants and landlords need advice on how to optimise their positions to ensure the rent paid is the best that can be negotiated.

 

The generally used concept for office, shop, factory or warehouse property - for rent review today, is “open market value” (more correctly now referred to as Market Value). This operates on the basis that there is a trend or tone of rental values which can be interpreted from open market lettings and rent reviews of other similar properties in the area. The obtaining of this rental information and its interpretation has become more complex and again qualified by legal cases. Obtaining of market data and its interpretation is generally left to specialist surveyors who will negotiate with the other party or their surveyors to reach an agreed settlement.

 

It is quite normal procedure for landlords to build negotiating margins into their quoting rents There are frequently time traps in the lease as a result of which a landlord or tenant may lose the right to impose or contest a rent review. Professional advice should be sought at least six months in advance (in some cases more) of a rent review date or certainly by the tenant as soon as a rent review notice is served.  

 

Leases usually contain provid provisions to resolve matters where the parties or their surveyors cannot agree on the rental value of the property. In these cases the dispute is settled by an Arbitrator or an Independent Experts. In either case the Arbitrator or Expert will view the formal evidence submitted by the parties surveyors and make a decision binding upon the parties. The costs of such proceedings are generally paid by the parties, often attributed by the terms of the lease.

 

We have many years experience in negotiating rent reviews and preparing submissions to third party determinations.