Do you have a rent review due in the next 18 months?
A great deal of uncertainty surrounds a rent review: and it is not as though you can walk away if you don’t like the result, so budgeting is an important part of what we do for many tenants.
Rent review clauses are not intuitive to understand and much case law surrounds their interpretation, this is why it has become a specialism separate from agency.
A trusted understanding of valuation significant clauses and a robust application of current case law are the necessary tools needed to mitigate rent increases. We bring these to the negotiating table.
Ultimately you only have one lever to shift a landlord who is unreasonably holding out for a high rent, but it is a good one: applying for a 3rd party surveyor to weigh up both party’s valuations and decide the new rent means the landlord cannot side step the market reality. Preparing these valuations for third parties is a vital part of our work and we use our expertise in that area to challenge landlord’s to put together a coherent response. Usually that challenge is enough to get a sensible negotiated settlement.
Without having the ability to write these valuations you have no lever in negotiations. It is common for landlord’s to have more expertise in negotiating rent reviews than tenants do and there is only one way to address that imbalance: get an expert rent review surveyor.
We cover central London and Fringe offices, we also cover the south east market in both offices and industrial and consider rent rolls from £75,000 p.a. upwards.
Top Tips for Occupiers: Rent Review
How much time do I need to prepare for a rent review?
Rent reviews typically occur every five years depending on the length of the lease. Don’t leave it to the last minute to consider your rent review strategy. There may be time limits stipulated in the lease’s rent review clause within which the landlord or tenant might have to issue or respond to a rent review notice. Eighteen months before the rent review date should give sufficient time to start checking the lease to ensure it doesn’t specify a time limit and to appoint a rent review surveyor. Missing deadlines can be costly: tenants could have to pay an inflated rent.
Does the tenant pay rent while the level of rent is being disputed?
Yes. The tenant must pay rent at the old rate whilst the rent review is being negotiated. Once an agreement is reached the difference (back rent) will have to be paid. If the rent increases, interest often has to be paid on the overdue amount.
What is “Open Market Rent”?
Open Market Rent is the best rent a property might achieve if let on the open market, given a willing landlord and tenant and taking into account the terms of the lease and the state of the local commercial property market.
Why should we appoint a lease consultant for the rent review process?
Rent reviews can be technical and complex. Appointing a surveyor is the most effective way of accessing the open market, taking into account local comparables and negotiating allowances on specific points and assumptions. Surveyor’s fees are inexpensive in comparison to overpaying rent or for letting the case reach arbitration.