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ADB | RENT REVIEWS |

There are a proportion of older leases that state that time is the essence for the service of rent review notices and it is essential that leases be checked in good time in advance of the review date (often more than 12 months before) to identify if this wording is

present.

If

it

is,

it

is

essential

that

time limits are or the tenant’s

strictly adhered to, ability to challenge

the quoted rent may be lost.

Whilst

the

lease

may

not

specifically specify that time is of the essence for the service of rent review notices and the conduct of the rent review itself, the inter- relationship of other clauses within the lease can give rise to the same

effect.

The

usual

example is

where

there

is a

relationship

between the timing of the rent review notice and the serving of a notice to exercise a break option.

In any event, it is

important to

understand

the

procedures

whether

expressly

stated

or

implicit in the lease and to ensure any necessary steps are diarised well in advance of the review date.

Preparation

in

good time

of the

review date

is

advisable.

Tactics

are one establish these are

of the key points to early on and typically formulated against the

backdrop trends. example,

of market conditions and In a rising market, for the tenant may be best

advised

to seek

a settlement

as

early as

possible

to minimise

the

risk

of

comparable

rental

evidence

review

date

and a

tenant’s

own

budgeting

planning

requirements.

arising subsequent to the date that demonstrates a

review higher

rental level than that arisen prior. Whilst evidence closest to the

which had comparable review date

a: 24 Old Burlington Street, Mayfair, London, W1S 3AW

www.adblondon.com

is considered the most relevant, it is also appropriate to have proper regard to comparable transactions that have been concluded at other times.

Other also

aspects of influence

the lease may

the

strategy

established.

These may include for

example

consideration

of

the

interest

provisions

for

settlement

subsequent to Typically, most

the review date. modern leases will

specify

that

where

the

rental

is

increased review

subsequent date, the

to the difference

between the old rent rent is accrued as

and the new a debt and

repaid with settlement.

any

interest

upon

Some leases apply relatively penal rates of interest at 2-3% above base, by way of example, which is essentially an incentive for the tenant to reach a settlement as early as possible.

Other issues such as the third party procedures, including whether it is to be an Expert or Arbitrator appointed, are considerations when establishing a

strategy.

This particular topic is

addressed

in

greater

detail

elsewhere.

strategic alliances

One of

the

establish

at

formulati

ng

a

primary goals to the outset when strategy for the

review is to seek any advantageous alliances with other parties in the geographical area with similar types of premises who

t: 020 7494 0377

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