{"id":185975,"date":"2024-01-24T04:28:01","date_gmt":"2024-01-24T04:28:01","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=185975"},"modified":"2024-01-24T04:28:03","modified_gmt":"2024-01-24T04:28:03","slug":"rent-review-tenant","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/commercial-lease-property\/rent-review-tenant\/","title":{"rendered":"Key Points a Tenant Should Know About Rent Review Clauses"},"content":{"rendered":"\n

When you enter a commercial lease<\/a> as a tenant, there is a lot you must consider. Obvious considerations include the commercial property\u2019s location, rental amount and the lease term. However, a commercial lease agreement contains many lease provisions which detail the rights and obligations of parties to the lease. One lease provision you may find is a commercial rent review clause. This has significant implications for you, as a commercial tenant, as it affects the rental amount, often causing rent increases. This article will explain four essential considerations where a commercial lease has a rent review clause. <\/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 provision in a commercial lease that allows a landlord to assess the amount of rent their tenant pays periodically. Not all commercial lease agreements contain this clause, but the longer the lease term, the more likely it will contain one. As the rental market changes over time, landlords want to ensure they get a fair price for their commercial property. Below we consider points you should consider in a rent review clause. <\/p>\n\n\n\n

1. Rent Increase  <\/h3>\n\n\n\n

As a commercial tenant, you must understand that rent will only increase or remain the same after the rent review. While some agreements explicitly detail this, others may not. A rent review will generally never result in a rent decrease. It is necessary that you watch out for a rent review clause during the heads of terms stage of a commercial lease. Here, you can discuss the rent amount. As it is likely to rise as the lease proceeds, you can try to ensure that it does not reach an amount you will not be able to afford.<\/p>\n\n\n\n

2. Rent Review Interval <\/h3>\n\n\n\n

If you have a rent review clause in your lease, you must watch out for the rent review interval. A rent review will typically occur every three to five years in a commercial lease. However, this period may be longer when you have a lengthier lease. It is important to note that a commercial lease of less than seven years, should not contain a rent review clause. It is generally industry standard that a lease of this period or less does not require a rent review.<\/p>\n\n\n\n

3. Rent Review Type<\/h3>\n\n\n\n

When commercial leases have a rent review clause, how the landlord assesses your level of rent will vary depending on the type of rent review. Therefore, it is important that you look out for the rent review type when considering a rent review clause. <\/p>\n\n\n\n

Four main types of clauses are:<\/p>\n\n\n\n