Rent Reviews

Question 1

What governs a rent review?

Answer 1

The lease and the rent review clause.

Question 2

What type of rent review are there?

Answer 2

1. Market rent
2. RPI linked
3. Turnover rent

Question 3

What are the standard assumptions?

Answer 3

1. Permitted user
2. Vacant possession
3. Fit for immediate occupation and use
4. Tenant has had the benefit of any rent free period
5. All other lease terms have been complied with

Question 4

What are the standard disregards?

Answer 4

1. Goodwill
2. Any effect on rent arising from the tenants occupation
3. Any effect on rent from tenants improvements
4. Any addition in rent obtained from a licence for a licence premises

Question 5

What is time of the essence?

Answer 5

Where you need to comply with the time limits in the lease to action a rent review.

Question 6

When is time of the essence?

Answer 6

If it is expressly stated in the lease or if there are contradictions in the lease that would make time of the essence.

Question 7

What are the contradictions in the lease that would make time of the essence?

Answer 7

1. If the rent review clause is linked to another clause (break clause)

Question 8

What are the consequences when time is of the essence?

Answer 8

For tenants, they will be bound by the landlords proposal if they do not serve a counter notice.

For landlords, they will lose their right to review the rent.

Question 9

Can you make time of the essence?

Answer 9

No - court ruled in Proxima vs Spence case that a tenant serving notice putting time of the essence on the landlord would have no effect if the lease says the landlord can trigger the review at anytime after the rent review date.