Rent Review - The Case for Commercial Rent Reviews

Rent Reviews

Rent Reviews


Sep 2, 2014

Stuart Neils are one of the country’s most experienced rent review negotiators. We act exclusively for tenants and have a proven track record of winning settlements that reflect true market values rather than the over-inflated sums which landlords often unfairly achieve using compromised evidence.

If you have a commercial rent review coming up, please call us on 020 7493 0077 for a confidential discussion about your case, or read on to find out more.

What is a Rent Review?
Almost all commercial property leases which are granted for more than five years include provision for a rent review within the period of the lease. They are usually set to take place every five years and allow the landlord to increase the rent you have to pay.

If you have a rent review coming up soon, you must take action as soon as possible. What you do now will have a major effect on the commercial rent you will be paying in the years ahead.

The Rent Review Process
The way your new rental will be decided is based on actual rents being paid by tenants of similar properties nearby. At the review, both parties can present evidence of current rental charges on comparable local properties to prove what other tenants are paying.

Of course, the landlord will try to collect evidence that supports a higher rental. Your surveyor can challenge this by picking out details of the lease contract and the facilities and amenities of the building to demonstrate that it is not a true comparison. They can also present their own evidence of similar properties where a lower rent is being paid.

Why you must act now
It’s all too tempting to park rent reviews in the “to do later” folder, especially if you have not received a rent review notice. In fact, landlords often quote well after the rent review date. This is a common tactic as the delay allows the landlord to gather more evidence that certainly won’t be in your favour including transactions with valuation dates after the subject review date.

Unfortunately, when it comes to commercial rent reviews the odds are stacked in favour of the landlord. That’s because nearly all commercial contracts stipulate an ‘Upward Only Rent Review Clause’, which means that the rent cannot go down, even if the rental market has fallen during that time.

When the new rent is agreed the landlord can back date it to the rent review date and demand that the shortfall is paid in one lump sum. The landlord can also charge interest on the whole amount.

Your best course of action is to take control now. Almost every lease gives the tenant the power to bring the landlord to the negotiating table before the review date which allows you to gain the upper hand.

The fact is if you instruct a firm like Stuart Neils, you will improve your chances of getting a lower settlement simply by being pro-active. The quicker you act, the more money you will save.

Negotiating a Commercial Rent Review
We have detailed and up-to-date knowledge of actual commercial rents being paid in your area. This first hand proof of true rental charges, which is vital to winning a favourable settlement, can be extremely difficult and time consuming to research if you have no prior experience or contacts.

Commercial property leases are complex. We have the knowledge and experience to challenge the evidence the landlord puts forward by comparing in detail all the amenities and various clauses in the lease.

This expertise and insider knowledge means that the savings negotiated by us invariably far outweigh the cost of taking professional advice. It also leaves you free to concentrate on running your own business. In the table below we have set out examples of saving we have achieved.

Coca Cola1,896,0001,270,000626,000
Meridian Securities164,600115,00049,000
Blitz Charter Group395,000314,00081,000
Kexim Bank148,00076,00072,000
Al Hamra Restaurant114,00075,00039,000
Office for Public Management255,000185,00070,000
Bindman and Partners345,000265,50079,500
Chemical Industries Association972,500834,150138,350
Holmen Paper385,000275,000110,000
Hoare Lea518,000420,50097,500
ClientLandlord’s quoting rent per annum (£)Rent agreed by Stuart Neils per annum (£)Annual saving achieved by Stuart Neils (£)

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Obviously, the landlord always wants to get as high a rent as possible while the tenant wants to pay as little as possible which creates a clear conflict of interest for firms which undertake work for landlords and tenants.  At Stuart Neils we only act for tenants so that we can give them untainted advice and the best possible service.

Ask us about your rent review
We are always happy to answer questions about any aspect of commercial property. If you would like an informed, professional opinion about the best way to contest your forthcoming rent review, please call now on 020 7493 0077.

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