This cheatsheet includes practical tips to understand key clauses and avoid disputes in leasing agreements.<\/p>\n <\/div>\n \n\nDownload Now<\/a> <\/section>\n <\/div>\n\n\n\n\n A rent review clause should always state when the review will occur. While the commercial lease agreement may expressly detail the exact rent review date, this may not necessarily be the date the rent review happens in practice. Instead, it is usually the date on which the rent review can commence. <\/p>\n\n\n\n In this sense, a commercial landlord has some flexibility in carrying out the rent review. For example, they may be busy on the review date with another commercial property or could be away on holiday. Additionally, a rent review will take some time to complete and can result in the tenant appealing the rent increase<\/a>. Therefore, the landlord generally has ample time to complete the rent review.<\/p>\n<\/div>\n\n\n\n As a rent review can occur after the date when it may commence, the rent will remain at the current rental amount for the commercial tenant. When the rent review occurs later, the rental may stay the same or increase. If the rent increases, a commercial landlord has the right to backdate the difference of the increase from the rent review date specified in the lease agreement. They can also charge interest. Consider the following example. <\/p>\n\n\n\n Suppose the commercial lease rent is \u00a318,000 per annum. The rent review clause says that the rent review can commence from 1st April 2022, but the landlord does not conduct the rent review until 1st April 2023. The rent review on 1 April 2023 resulted in a rental increase to \u00a320,000 per annum. Therefore, the commercial tenant will have to pay \u00a32,000 to make up the rent difference for the year as they will have paid \u00a318,000 as this was the previous rental amount.<\/p>\n<\/div>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\nWhat is Backdated Rent? <\/h2>\n\n\n\n
Rent review methods include:<\/p>\n\n\n\n
- \n
- open market rent review, which is where the landlord assesses the rent in terms of the market value of the property if it were let to a new tenant at that time;<\/li>\n\n\n\n
- index-linked rent review, which is where a landlord assesses rent in accordance with an index such as the Retail Price Index<\/a> (\u2018RPI\u2019); and<\/li>\n\n\n\n
- stepped rent review, which is where the rent increases by a specific amount at a precise point in time-based on the parties\u2019 agreement.<\/li>\n<\/ul>\n\n\n\n
Generally, a rent review should not occur when the lease is of a seven-year term or less. <\/p>\n\n\n
\n![\"Front](\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/4\/2023\/05\/04050959\/LegalVision-Landlords-Cheatsheet-for-UK-Leasing-Terms.jpg\")
\n \n Cheatsheet for UK Leasing Terms<\/div>\n\n\n\n - stepped rent review, which is where the rent increases by a specific amount at a precise point in time-based on the parties\u2019 agreement.<\/li>\n<\/ul>\n\n\n\n