Rent Review

UK commercial property leases usually will include a rent review at regular intervals, usually every three or every five years. The rent will be reviewed to the level of the current market rent for the subject property. Traditionally rent reviews are ‘upward only’, meaning that if the market rent has dropped, the rent at review will not increase, but it will not drop either.

This upward only restriction stacks the process firmly in the Landlords’ favour. In a rising market the rent goes up, but in tougher times the rent will not decrease, potentially leaving a tenant paying much more than if they were to take out a new lease (and more than they could achieve by sub letting the property). As such the Government have been reviewing the upward only practice with a view to legislating against it.

The rent review clause will also include the assumptions on which the reviewed rent is to be calculated.