If you run your business from a commercial space, you likely lease the business premises from a landlord. This means you will have a commercial lease agreement containing your lease details. One of the key lease terms is the rental payment you must make in return for occupying the property. This is a crucial lease obligation for you, as it may be one of your business’ critical expenses and is likely one you need to make monthly. While you might agree on a rent rate that works for your business at the start of your lease term, the rent may be subject to review. Where your rent increases due to a rent review, you may have concerns about whether it is fair. This article will explain how to check if your rent review is fair.<\/p>\n\n\n\n
A rent review is where your landlord reviews the rent you pay for your commercial property to adjust it to market rental for properties.<\/p>\n<\/div>\n\n\n\n
You can expect the rent to always increase from what it was before. But, sometimes, it can remain the same.<\/p>\n\n\n\n
Your lease should have a rent review clause<\/a> detailing when a review will occur, usually every three to five years. The lease clause will also describe how your landlord will review the rent. For example, your landlord may carry out your rent review through:<\/p>\n\n\n\n If you want to check if your rent review is fair, consider how your landlord carries out our review and what they base it on.<\/p>\n\n\n\n Several factors can determine whether your rent review is fair, as explained below. <\/p>\n\n\n\n If your landlord carries out a rent review and increases your rent, they should be reasonable and provide the basis upon which they came to the new rent. <\/p>\n\n\n\n Your lease should specify when the landlord can carry out the review, and ideally, this should obligate the landlord to give you advance notice.<\/p>\n<\/div>\n\n\n\n To check if your rent review is fair<\/a>, you can look at the rental prices for similar commercial properties in the area. You can do this by looking at property websites or speaking to estate agents. Remember to look at commercial spaces with the same \u2018use class\u2019 as your property. \u2018Use class\u2019 details what commercial activity planning law permits at your premises.<\/p>\n\n\n\n When your landlord assesses the value of the property you occupy, there are certain assumptions and disregards that they factor in. These should be specified in your lease agreement.<\/p>\n\n\n\n When your landlord considers assumptions, these could be that you, as the tenant<\/a>, have stuck to the lease terms in your lease agreement. For example, if, as a commercial tenant, you have a lease term that states you have a full repair obligation, the property value will assume everything is in complete repair even if, in reality, it is not because you have not kept to the lease obligation. This is because your non-compliance should not lower the value of the landlord’s property.<\/p>\n\n\n\n Disregards refer to aspects of your use of the property that the landlord does not think should influence the outcome of the review to market rent, for example, unauthorised works or goodwill of the business.<\/p>\n<\/div>\n\n\n\n One good way to check if your rent review amount is fair is to hire a professional rent review advisor or surveyor to see you through the process. A commercial lawyer can also look at the wording of the lease to see what the landlord should be doing when conducting the review. <\/p>\n\n\n\n First, however, you should check your lease agreement to see if you have to abide by any timeframe for hiring a review advisor or surveyor, as your rent review clause may detail this. Generally, the sooner you hire one, the better, as they can start researching the local area and select evidence to see if your rent review is fair. <\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n\n
Fair Rent Review <\/h2>\n\n\n\n
Reasons<\/h3>\n\n\n\n
Market Rental Values<\/h3>\n\n\n\n
Property Value<\/h3>\n\n\n\n
Rent Review Advisor<\/h3>\n\n\n\n