20 Nov 20 by Lesley Anderson
The Lease Advisory team at Vickery Holman have recently concluded a number of rent reviews for both Landlord and Tenant clients across the South West. Whilst 2020 has been one of great uncertainty, there is a feeling among both landlord and tenants that life must get back to as normal as current restrictions will allow. The rent review process needn’t be difficult or drawn out, especially if the right advice is obtained. Amy Durkin explains two recent examples that show why timing when dealing with a rent review is important.
Rent review trigger notices
It is important for tenants to be aware that a rent review can be triggered up to six months before the review date and at any point afterwards. Case law has shown examples where a rent review has been settled more than 10 years after the review date. Usually, the agreed rent will be backdated to the rent review date, with tenants often receiving a large back rent bill which can cause problems with liquidity.
We recently acted on behalf of the long leaseholder in a ground rent review of a 56,000 sqft industrial unit in central Bristol. Our client received notice that the lapsed 2018 rent review was to be triggered earlier in 2020. They contacted us and asked that we negotiate the matter on their behalf. Through careful consideration of market evidence and expert knowledge of rent review clause wording, we were able to save the client over £18,000 from the initial ground rent the Landlord quoted. We were also able to negotiate an instalment plan for the payment of the back rent.
Equally, beginning rent review negotiations before the review date ensures there is no worry about back rent and the latest market evidence is analysed to determine the Market Rent. We recently negotiated a rent review on an industrial unit in Plymouth on behalf of a long-standing landlord client and agreed on a new rent with the tenant two months before the rent review date.
A rent review trigger notice seemingly out of the blue may be confusing and stressful for a tenant, so it is important to seek professional advice on the steps to be taken, to ensure a fair and reasonable settlement is agreed. Both Landlords and Tenants can pre-empt a rent review date and begin the negotiating process, so it is worth keeping a clear record of rent review dates, both lapsed and upcoming.
For more information about what our Lease Advisory team can do for you, please contact Chris Sexton in our Lease Advisory team.