Property News

Time of the essence.


Oct 21, 2015

It is well known that in terms of a rent review, time is not of the essence.  This means that the rent review can be agreed after the review date which shouldn’t prejuidice anyone, should it?

Well actually, the saying “time is money” is very accurate in a rising market.  Although the rent review valuation date is a fixed point of time, one of the tactics landlords use, with time not being of the essence is to delay quoting a rent until well after the rent review date.  This allows them to

  1. collate as much rental evidence as possible; and
  2. include transactions with valuation dates after the subject review date; and
  3. charge interest on the balance of rent owed back dated to the review date.

There is however one action a tenant can take to prevent this and that is to apply as soon as the lease allows to the Royal Institution of Chartered Surveyors for the appointment of an independent surveyor (who is told to hold matters in abeyance) and with a surveyor appointed the landlords have no option but to initiate negotiations and this would be to a tenant’s advantage.  By taking this action, you can prevent the landlord from benefitting from these three points.  Just imagine, what £1 per sq ft multiplied by at least 5 years comes to in terms of your rent.  Now imagine it was £2, £3 or more per sq ft.  This saving can me made just because you didn’t sit back and wait for the landlord to quote.

 

 

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