Rent Review, 55 (2) Oldmedow Road Flashcards
What was the process you followed for this rent review?
- Read lease and rent review clause
- Check time limits for serving the trigger notice
- Inspect and measure the property
- Source comparables
- Analyse and put into a matrix
- Value to Market Rent
- Send Trigger notice
- Negotiate with agent / send supporting evidence
- Case ongoing
10 Agree / refer to third party
What is the passing rent?
£65,000
What was your proposal?
£85,000
Describe the improvement works?
The tenant had enclosed an external area with profiled steel sheet cladding to provide them with additional floor space for placement of plant and equipment, as well as an internal loading bay.
Why were the improvement works not disregarded from the rent?
The rent review clause said the works should not be disregarded - the works were undertaken as an obligation to the landlord, who provided a rent free period in exchange for undertaking the work.
How did you reflect the improvement works in the rent review at Oldmedow Road?
I included the area with my gross internal area calculations and then applied a rate per square foot to the subject property.
What were the assumptions and disregards in the rent review clause?
Assumptions
- Permitted user
- Vacant possession
- In repair and all covenants of the lease had been complied with
- Tenant had received the benefit of any inducements
- All other terms the same as the existing lease
Disregards
- Goodwill
- Effect on rent from occupation
- Improvement works save for the works undertaken as an obligation to the landlord
What impact would these works have on dilapidations?
Landlord reserves the right to seek reinstatement of the works at the end of the lease.
The cost of reinstatement will be capped to the diminution in value by S18 of the L+T Act 1927
Was time of the essence?
No
What are the consequences where time is of the essence?
If a tenant fails to serve a counter notice, then they will be tied to the landlords proposed rental figure.
If the landlord doesn’t serve the notice in time, he will lose his right to review the rent.
What happens if a tenant fails to serve a counter notice within the required time period??
Not fatal as per the decision in case law.
When is time of the essence?
- If it is expressly stated in the lease or if there are sufficient contradictions in the lease that would make imply time is of the essence
