Rent Review

During a rent review landlords and tenants can negotiate on the rent for a commercial property at regular intervals.

Rent Review

These reviews might happen every few years and could also be triggered by events like lease renewal or if a tenant spontaneously asks for a rent decrease based on other reasons. 

This process helps ensure that the rental agreement stays in line with market trends.

Frequently asked questions

What determines the rent review?

Rights and responsibilities outlined in the lease play a role in determining the results of a rent review. The state of the property market also has an impact on this outcome. When the market is thriving landlords often have power to push for rent prices. Conversely, in a weaker market tenants typically aim for reduced rents or additional benefits. Various factors such as property condition and the financial stability of the tenant also come into play during negotiations.

How should I prepare for a rent review?

You should give notice and then start negotiations during which time you should consider hiring a surveyor to support you. Being well prepared is beneficial to both landlords and tenants before a rent review, as each need to understand the property’s condition and value against the current local market trends, as well as their rights and responsibilities under the lease.

Is it advisable to have my own surveyor?

Surveyors review the market rents for different types of properties and can provide you with advice throughout the review process. Both landlords and tenants have the option to hire their own surveyors as we suggest in order to protect their interests and reach an agreement on the rent by avoiding standstills and maintaining effective communication between the parties.

How is the new rent calculated?

To assess the market rate of commercial rent during a rent review, there are two methods: 

  • Retail Prices Index (RPI): this measures changes in the rent across the UK.
  • Localised: observing comparables in the local area and reviewing lease advisory reports

The method selected will vary based on the landlord’s preferences and how detailed they want to assess the rent. Surveyors will conduct their calculations and discuss legal aspects outlined in the commercial lease accordingly.