rent reviews in commercial property

Most commercial leases contain provisions for periodic rent reviews over the course of the lease term. We have Chartered Surveyors with experience of acting for landlords and tenants of office, retail, industrial and other commercial properties.

For each party, a good knowledge of the local letting market and a clear understanding of the rent review clauses are essential in order to reach a favourable outcome. We believe forward planning and sound professional advice are the keys to achieving the best possible result.

The rent review clauses of a commercial lease usually cover:

• The date and timing of the rent review
• The obligations of each party in reaching an agreed settlement
• The actions to be taken if an agreed settlement is not reached
• The rules for the appointment of a third party Arbitrator or Independent Expert
• The definition of rent for the purposes of the rent review
• Any special assumptions or matters to be disregarded in valuing the rent for review.
• The way in which the completed rent review should be recorded

A few leases will set specific deadlines on the implementation and processes of the rent review. Failing to adhere to these deadlines may result in one or other party losing the right to protect their position.

‘Upward only’ rent reviews are the most common in commercial leases. This means that the rent will either stay the same or increase at review, but it cannot decrease. Other forms of rent review may be linked to prices indexes, fixed increases or business turnover.

Please contact us should you require advice or assistance with your commercial rent review.