News & Insights Default

Why Should You Use A Chartered Surveyor for Rent Reviews?




Rent Reviews are typically found in commercial leases typically for industrial and warehouse units, office buildings and retail premises as well as leisure and other peripheral property types.

Why Should You Use A Chartered Surveyor for Rent Reviews?


Landlords want to see rents keeping up with market values during the terms of a lease and in many cases rents are often reviewed at 3 or 5 year intervals, although there is no hard and fast rule as to when a rent review should take place. Generally the review periods are often agreed between the parties at lease commencement.

The Rent Review clause in the lease will define how the new rent is to be calculated, and will set out the assumptions (length of lease, use, state of repair etc.) and disregards (goodwill, tenants improvements etc.) that are to be made. The assumptions and disregards that are to be made are generally similar across most commercial leases, however slight variations can have a significant impact on the rent calculation.

Whilst most rents are reviewed to a Market Rent which is assessed by reference to comparable transactions, other rents can be reviewed to pre-agreed fixed amounts, or by reference to RPI (Retail Price Index).

The majority of Rent Review clauses require the rent to be reviewed on an upward only basis i.e the new rent is to be the higher of the Market Rent or the rent passing immediately before the review date, however it is possible (where the tenant has managed to negotiate it at lease commencement) for rents to be reviewed on an upward or downward basis, although this is often strongly opposed by Landlords (except during weaker market conditions where tenants hold a stronger negotiating position).

A question Eddisons is often asked is ‘How can a Landlord serve a rent review notice increasing the rent from a review date that was years ago?’ The short answer is that, unless the lease states to the contrary, there is usually no time limit for a rent review notice to be served, meaning that even if a rent review date was 4 years previous to the date notice was served, the rent review is still valid and capable of being negotiated. In these instances it is particularly important to seek advice from a Chartered Surveyor. Barker Storey Matthews now part of Eddisons keep a comprehensive database of transactions which can be referred to in order to support a case (on behalf of Landlords or Tenants) in such instances.

A word of warning – some rent review clauses state that ‘time is of the essence’, and will set out an explicit timetable for the service of rent review notice and the requirements for the Tenant’s response. Where a lease states that time is of the essence, it is vitally important that both Landlords and Tenants ensure any timescales defined in the review clause are met. Barker Storey Matthews now part of Eddisons are happy to review leases and provide further advice on this point if required.

It is often the case that Landlords and Tenants alike believe they do not require a Chartered Surveyors assistance to agree a Rent Review, but all too often we come across situations where Landlords or Tenants have been financially disadvantaged as a result of not seeking professional advice at the appropriate time.

For Landlords, a well negotiated Rent Review can result in an uplifted rent, which in addition to improving the cash flow that is received from an asset, can in turn have a positive impact on the capital value of the property.

For Tenants, a poorly negotiated Rent Review can have a detrimental impact on the performance of the business resulting in increased overheads, and can also have a knock-on effect on the Business Rates payable on the property as the Valuation Office will have regard to the rent being paid under a lease at the point of assessing the rateable value of a property.

Contact one of Eddisons specialist rent review surveyors to discuss your requirements or for an informal discussion.

Get in touch with the Eddisons team

Please contact us for more details and information

Related reading

View All
New Government firmly links planning reform with growth agenda Liverpool, United Kingdom   October 09 2023 Labour Party Conference  The Shadow Chancellor of the Exchequer, Rachel Reeves announcing the Labour party's financial manifesto for the General Election


New Government firmly links planning reform with growth agenda

Read More
Eddisons builds on senior level commercial surveying offer Annette Booker   Associate Director   Eddisons Kettering & Northampton   July 2024


Eddisons builds on senior level commercial surveying offer

Read More
Rare Velocette LE 'Noddy bike' to be auctioned after garage discovery Velo


Rare Velocette LE 'Noddy bike' to be auctioned after garage discovery

Read More
Eddisons celebrates constructing excellence in the East Midlands 01 Image courtesy of ASI Newark Lincoln College   June 2024


Eddisons celebrates constructing excellence in the East Midlands

Read More
View Meet the Team
CTA grid   Our Team

Our team

We're proud to employ more than 450 talented individuals working across a multitude of disciplines.

Find Your Nearest Office
UK Map   Dotted

Office finder

Eddisons is rapidly growing; emphasised by our nationwide network of 30 offices across the UK.

Get In Touch with Eddisons
CTA grid   Contact Us

Contact us

We're ready to take your call and can quickly pass you through to the right department.

Sign Up To Our Newsletter
CTA grid   Newsletter


Join thousands of property managers, occupiers, landlords and investors receiving the latest insights.

This site uses cookies to monitor site performance and provide a more responsive and personalised experience. You must agree to our use of certain cookies. For more information on how we use and manage cookies, please read our Privacy Policy.