Rent Reviews Lawyers Liverpool & North West London
Most long term modern commercial leases of will have a clause dealing with the review of the rent payable under the lease, and sometimes even leases as short at 3 years will have some provision.
There are several different types of rent review clause, although the most common is the ‘open market’ rent review.
This clause will typically set out a number of assumptions which are made about the property, such as it being vacant and ready to be marketed for let, and will conversely make a number of disregards such as any improvements which have been made to the Property. All of these terms then play a part during the review process/
The assumptions and disregards, when taken together, form the ‘hypothetical lease’ – which forms the basis of how a valuer or surveyor reviews the open market value of the Property. It is important to therefore understand that such rent reviews are not always based on what is physically at the Property, but what ‘hypothetically’ exists. The extreme example here would be that even if the Property have been destroyed in a fire, the outcome of the rent review would be on what open market rent would be payable under the ‘hypothetical’ position.
Whilst the exercise of a rent review is therefore purely a valuation, the drafting of the lease (undertaken by solicitors) becomes very important and can have a significant effect on what the outcome of any rent review might be.
Contact our Commercial Rent Reviews Lawyers in Liverpool & North West London today
If you have any concerns around an up coming rent review and need a greater understanding on the terms of your leases, please do not hesitate to get in touch.