In a recent example, the landlord quoted a rental at review of £140,000 per year. We measured the premises, researched the market and negotiated a rent of £92,000, thus saving our client a total of £240,000 over the next five years. You can see why it pays to take good advice!
Normally rent reviews occur every 5 years and within most leases is a clause stating that the rent cannot fall at review. However, the rent can fall when a lease is renewed.
A landlord usually quotes a figure higher than he expects to agree in both rent review and lease renewal situations. A tenant is well advised to take professional advice as the agreed rent will not only be affected by market evidence, but also any unusual clauses held within the lease.
With the majority of leases being excluded from the provisions of the 1954 Landlord & Tenant Act, tenants wishing to remain in occupation after the end of the term should commence lease renewal negotiations well in advance of the expiry of the existing term. This is in order that the landlord cannot exert undue pressure on the tenant because insufficient time has been allowed to relocate if negotiations cannot be concluded satisfactorily.
Agreeing the rent is done by exploring recent market evidence of comparable premises and measuring and agreeing the floor area in accordance with the RICS code of measuring practice.