Estate Agents

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Commercial Property Services

Rent Reviews

Rent review provisions in commercial property leases were originally introduced to counter the effect of inflation during the term of the lease. A standard rent review clause will

 
Commercial Services
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Services Q to V

generally require the rent to be reviewed at fixed intervals, usually five yearly, during the term.

The vast majority of rent review clauses require the assessment of the open market rack rental value, at the review date, in accordance with specified terms.

Some rent reviews are however geared to the tenant's turnover or profitability, or movement in the Retail Price Index. In the case of calculating the market rent for a demised premises, the form of the review clause will vary from lease to lease.

In general however the clause should make clear: -

(i) the review period;

(ii) the procedural steps for having the rent reviewed;

(iii) whether or not time is of the essence in the service of notices;

(iv) the basis of valuation, i.e. assumptions and disregards;

(v) any hypothetical terms and conditions to be adopted;

(vi) in default of an agreement, the procedure for the appointment and determination by a third party surveyor such as an Independent Expert or Arbitrator;

(vii) the effect of a late review, i.e. from when the rent is payable and whether interest is payable thereon;

(viii) whether the rent can be reviewed upwards or downwards.


- Christo & Co -
Commercial and Residential property specialists, estate agents, valuers and surveyors
in Kentish Town, Camden Town and throughout North & North West London

66-70 Parkway, London, NW1 7AH - Tel: 020 7482 1203 - Fax: 020 7482 4441
- Web: www.Christo.co.uk