Regular rent reviews and lease renewals are inevitable for tenants who occupy premises by way of a lease and for Landlords who have granted occupational leases to their tenants.
Fairhurst Estates have a reputation for dealing with rent reviews throughout the UK that results in a satisfactory outcome for both Landlords and Tenants. We manage the full process throughout which typically consists of the following:
- Our appointed Chartered Surveyor will review the lease and agree the fee
- The appropriate Rent Review Notice or Counter Notice is served
- A comprehensive Rent Review Report is produced including photographs, an OS extract plan, a summary of the lease terms and a rental valuation and recommendation
- The premises are inspected & measured in accordance with the RICS Code of Measuring Practice
- We negotiate a fair market rent with the Landlord/Tenant or their agent
- Upon reaching a settlement and client’s approval, the Rent Review Memorandum is completed, copies issued and attached to the revised lease
In rare circumstances where an amicable settlement is not reached, Fairhurst Estates Chartered Surveyor will prepare detailed written evidence for submission to an independent 1/3 rd party or Arbitrator who will determine the Rent Review.
Information for Tenants
If you are a tenant and a Landlord has served a Rent Review Notice, then it is vitally important that you take professional advice to ensure that the agreed rent is a fair market rent and not the rent that is proposed within the Rent Review Notice. It will be essential that a Counter Notice is served in response to the Rent Review Notice as in accordance with the terms of the lease. Although the Landlord may claim that the rent proposed in the Rent Review Notice is a fair market rent, it is invariably his/her inflated opinion of the market rent.
If there is a Time of the Essence clause within the Rent Review clause, and a correct Counter Notice has not been served, in accordance with the terms of the lease, then the rent may well be fixed at the rent quoted in the Landlord’s Rent Review Notice. The agreed rent will be fixed until the next rent review, so it is therefore essential that a fair market rent is agreed. If a saving of £5,000 per annum is made from the Landlord’s rental proposal this will save the Tenant £25,000, (based on a 5 yearly rent review pattern).
Information for Landlords
If you are a Landlord, then it important that you are aware when your tenants have a forthcoming rent review in order to plan for the growth of your investment (assuming an upwards only rent review pattern). It will be essential that you serve a Rent Review Notice in accordance with the lease terms and negotiate a fair market rent for the premises.