Rent Reviews

2 min read

At Aristone Solicitors, we understand that rent reviews can be a sensitive subject for landlords and tenants alike. We also know that disputes and disagreements regarding rent reviews are far from uncommon.

Whatever the nature and extent of the dispute, we can provide the objective legal advice you need to ensure a prompt and amicable resolution. Whether planning ahead or in the midst of a disagreement, contact the commercial property experts at Aristone Solicitors anytime for more information.

What is a Rent Review?

The term ‘rent review’ refers to the periodic reconsideration and subsequent adjustment of a rental charge, subject to a variety of factors. It is the responsibility of the landlord to indicate within the lease the extent to which rent reviews may be carried out, along with when the tenant can expect them.

However, it is also the responsibility of the landlord to ensure that their policy regarding rent reviews is fair, balanced and justified. In the event that a rent review is considered unfair or excessive, the tenant has the right to lodge a formal appeal.

Nevertheless, it is beneficial for both parties to prevent such action from becoming necessary. In the event of any kind of commercial rent review dispute, independent legal support should be sought at the earliest possible stage.

How Can Rent Be Reviewed?

Every landlord has their own unique approach to rent reviews, though the vast majority follow one of three standard systems:

A rent review takes place on an annual basis, at which point an increase may be negotiated, or may have already been specified as a fixed increase ahead of time.

A turnover rent review is based on the tenant’s current and prospective turnover, while occupying the landlord’s premises.

An open market rent review is based exclusively on market values, with rent adjustments being calculated to reflect the market norms.

The vast majority of landlords will, unsurprisingly, choose the most profitable type of rent review. However, they must also ensure that they do not price their tenant out of their premises in doing so.

How Often Do Rent Reviews Occur?

There are no specific rules regarding when and where a rent review can take place. Nevertheless, the vast majority of commercial rent reviews occur every 3 to 5 years. The length of the lease (and its terms and conditions) will usually determine how often a rent review is carried out.

Disputes often occur when landlords attempt to adjust rents on a disproportionately regular basis, therefore most make every effort to keep their rent reviews infrequent and fair.

What Happens if the Two Parties Cannot Agree?

It’s by no means uncommon for commercial landlords and their tenants to disagree on proposed rent adjustments. In which case, it may be necessary to pursue mediation and arbitration.

Most disputes involving rent reviews can be resolved outside the courts, with the involvement of experienced legal advisers. Nevertheless, it is important to ensure that qualified legal support is accessed at the earliest possible juncture, rather than waiting for the dispute to escalate.