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Rent Reviews are commonly at 3, 4 or 5 yearly intervals. An appraisal for rent review purposes requires a complete understanding of the terms contained in the Lease and interpretation of the rent review clause. A full inspection of the property is required and a Tenant’s schedule of improvements over the previous 21 years can often be disregarded in assessing the new rent.
The level of rent negotiated between the Landlord and Tenant’s Surveyors can usually be settled after exchanges of evidence relating to agreements of similar properties in the locality.
Occasionally, disparities between surveyors on the evidence, unusual properties, interpretation of a lease or Client’s high expectation can lead to third party determinations. An appointment of an Independent surveyor or arbitrator can be agreed between the parties or proposed by the Royal Institution of Chartered Surveyors (RICS).
Landlords and Tenants should generally contact their Surveyor at least 6 months in advance of the review date, although post review date agreements are common.
Lease renewals; timing and strategy is very important in the process to renew commercial property leases. The Landlord and Tenant Acts set out the principles of the procedure and whilst a new lease will generally follow the terms of its predecessor, other than rent, there is an opportunity to update historic clauses and renegotiate terms.
Unlike reviews where the rent is based on the interpretation of the rent review clause, the rent at renewal is based on an open market level, higher or lower than the current rent.
Landlords and Tenants should contact a professional advisor 12 months prior to a lease renewal date to seek initial advice.
Valuation of commercial property is required for many purposes. We will carry out a market appraisal of your property, leasehold or freehold, without commitment. If your requirement is too specific or one that requires specialist advice, we can advice you of an alternative advisor.
Andrew Clark MRICS has over 25 years experience of dealing with commercial properties in planning, development, professional and agency functions and will therefore be able to provide you with a very circumspect view.
To contact him please click here.