How Often Can My Landlord Increase Rent in the UK?

When you run a business, it is crucial to budget for your financial commitments to ensure you meet these. One such financial commitment is the rent you pay for the property lease of your business premises. Your commercial lease agreement will detail the current rent amount and the frequency of payments. Generally, you can easily budget for rent, as you typically pay the same amount in regular payments. However, your landlord can increase your rent through a commercial rent review, which is a normal practice for commercial leases. This article will explain how often your landlord can increase your rent and the overall process.

Rent Review 

Typically, your landlord may conduct a rent review for your commercial lease every three or five years. Your commercial lease agreement should detail this and specify the dates for the review reviews. 

The exact process your landlord follows will be stated in the rent review clause in your lease agreement, and they must follow this. You can usually negotiate with your landlord before you sign your lease agreement. Some rent reviews follow either:

• a periodic review in line with the Retail Price Index (RPI); or
• in line with your business’s financial turnover, with a minimum rent level set.

Most commercial leases state that rent will either stay the same or increase through a rent review. There will not normally be a decrease in your rent amount after one. If your rent does increase after the rent review, you can ask for the reasons and check if it is fair through a valuation by a surveyor.

Notice of Increase  

If your landlord decides to increase the rent, they have to give you notice. A trigger notice should be ample time, and lease agreements often state three months’ notice. However, the law states that the minimum notice your landlord must give is at least one month if you pay rent weekly or monthly.  

Ensure you are aware of what your lease agreement states about notice. If there is a  deadline your landlord has to abide by to inform you of a raise, and they miss this, they may no longer be able to increase the rent. Most rent reviews, as such, do not put any pressure on your landlord regarding the time when they carry it out. Accordingly, you may find there is no review for some time, and then a long overdue one takes place. Your landlord can backdate any rent increase when a rent review is outstanding. 

When you receive notice of a rent increase, you will have a specific timeframe to respond. Your landlord cannot simply impose a new rent level on you as a tenant. You may respond and oppose it and ask to negotiate the new rental amount. If you and your landlord cannot agree on a new amount, you should take legal advice from a solicitor specialising in leases. Also, if you believe the rent increase breaks your lease agreement, you can appeal it. 

Key Takeaways

As a commercial tenant, rent for your commercial property can increase due to a rent review. This is a process where your landlord assesses your rent level, often in terms of market value. Your lease agreement should state how frequently your landlord may conduct a rent review. If your landlord does increase the rent after a rent review, they cannot impose this on you. Instead, they must give you at least one month’s notice, and you may negotiate to agree on a new amount. You can also check if the level of rent is fair and appeal it where you believe it breaches your lease agreement.

If you need help understanding increases in commercial rent in the UK, our experienced leasing lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 0808 196 8584 or visit our membership page.

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