{"id":185900,"date":"2024-01-22T03:05:58","date_gmt":"2024-01-22T03:05:58","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=185900"},"modified":"2024-11-27T05:47:07","modified_gmt":"2024-11-27T05:47:07","slug":"landlord-rent-review","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/commercial-lease-property\/landlord-rent-review\/","title":{"rendered":"Key Points About Rent Review Clauses for Landlords"},"content":{"rendered":"\n

As a commercial property owner, you may choose to rent out your property in exchange for rental income. If so, the business owner becomes your tenant, and you will both sign a commercial lease agreement<\/a>. This agreement specifies that you grant your tenant sole occupancy of your property in exchange for rent for a specific lease term. To ensure that rent remains fair during the lease term, including a rent review clause can be valuable. This article will explain three essential points a landlord should know about rent review clauses. <\/p>\n\n\n

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Cheatsheet for UK Leasing Terms<\/div>\n
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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

Rent Review Clause<\/h2>\n\n\n\n

A rent review clause<\/a> is a commercial lease provision that allows the landlord to periodically assess the rental amount for the lease. This means that you will check whether your commercial tenant pays the right amount of rent for the commercial property. <\/p>\n\n\n\n

Several methods exist for reviewing the level of rent, and the rent review clause will specify which method you use. Additionally, it will detail how often you will review the rent. Usually, a rent review occurs every three to five years, with the interval increasing as the lease term lengthens. <\/p>\n\n\n\n

The results of your rent review will mean that the rent will remain the same or increase. Rent rarely goes down after a rent review, and your rent review clause may state this.<\/p>\n\n\n\n

Key Points for Landlords <\/h2>\n\n\n\n

As a commercial landlord, you must understand the importance of a rent review clause in your lease. Below are three key points about commercial leases with a rent review clause. <\/p>\n\n\n\n

1. Why?<\/h3>\n\n\n\n

As a commercial landlord, a rent review clause is essential to ensure that you do not miss out on potential rent. This is especially crucial when you have a tenant in a long-term lease. <\/p>\n\n\n\n

For example, if your commercial tenant takes a 15-year lease term, the rental market will likely change during that term. A rent review clause will allow you to change their rental amount to reflect this. However, you should not include a rent review clause if your lease is less than seven years.<\/p>\n\n\n\n

2. Types<\/h3>\n\n\n\n

If you decide to include a rent review clause in your commercial lease agreement, it is essential to know which types you can choose. There are three main types of rent reviews as follows:<\/p>\n\n\n\n