What is Rent Review?
Rent reviews allow Landlords of commercial property to periodically adjust the rent charged to Tenants based on different factors. As a Landlord you will want to review the rents on your properties as set out in the lease. Doing so will increase your rental income and profitability. As a Tenant you will want to minimise your liability and so proper negotiation and representation at rent review will be important.
Why do commercial leases have rent review clauses?
Where market rent is payable, the Landlord will want to ensure that it always receive the maximum possible rent for the premises and not bound by the rent amount which was set at the start of the lease.
How can rent be reviewed?
There are various ways in which the rent can be reviewed:
- A stepped rent review (the Landlord and Tenant might agree to increase the rent in fixed amounts each year)
- A turnover rent review (the Landlord and Tenant might assess the rent based on the Tenant’s turnover at the premises)
- An open market rent review (the rent is based on market values)
The most common and typical type of rent review is the open market rent review.
Why Instruct PA Surveyors?
Normally, both parties appoint their own property Surveyors to help manage the process and negotiations. At PA Surveyors we have access to a vast array of data to ensure all assessments are fully justified.
If both parties can’t agree on a new rate, there are established dispute resolution processes and arbitration systems in place. PA Surveyors can undertake such work.