Rent Review

Advise from a member of the team of experts at HS Legal solicitors in order to ensure a favourable outcome for your business with respect to a rent review, which is invariably best managed through negotiation. At HS Legal Solicitors, we recognise that resolving this matter expeditiously is in your and your company's best interest. We will provide you with guidance on the most effective course of action to ensure a favourable result.

What is a review of the rent?

Rent reviews enable commercial property landlords to regulate the rent charged to tenants on a periodic basis, taking into consideration various factors.

As a landlord, you will want to review the lease-specified rents for your properties. Doing so will result in an increase in both rental income and profitability.

To mitigate one's liability as a lessee, it is imperative to retain proficient legal counsel and negotiate the terms of the rent review procedure.

Rent review clauses are included in commercial leases for what reason?

In cases where market rent is applicable, the lessor will seek to secure the highest feasible rent for the property, rather than being constrained by the initial rental amount stipulated in the lease.

What constitutes a rent review?

There are numerous methods for reviewing the rental agreement:

• The landlord and tenant may reach an agreement to a fixed annual rent increase.
• The rent assessment between the landlord and tenant may be determined by the tenant's turnover at the property.
• Rent is determined by market values.

The open market rent review is the most prevalent and typical form of rent review.

What is the frequency of rent reviews?

Rent reviews average three to five years in duration, contingent upon the lease's length. A rent review clause in a commercial lease will specify the frequency, method, procedure, and resolution of rent disputes.

How is the rental amount determined?

• An open market rent review entails a recurring assessment of the rental amount in accordance with its value as of the date of review, assuming the premises were re-let for a new rental period.

• The new rental amount is determined by comparable lease rents on the local market. If after the review, it’s found that the rents in the local area have increased then the rent for the premises can be increased.

The landlord and tenant should attempt to reach an agreement on the new rent in the majority of cases.

Both parties typically retain their own property surveyors to assist with negotiation and process management.

The process of rent reviews in commercial leases is intricate and demands meticulous deliberation and negotiation. If you have any specific questions or would like more detailed advice on rent reviews, then please contact on 01206500181.