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Surbiton
26/Sep/2008 - A-Landlord - Surbiton
Upwards or downward rent review
Many tenants, and I should imagine landlords also, probably think that where a rent review is 'upward' or 'downward' so that the rent payable after the review could be less than before, the rent is likely to go down, in the prevailing economic climate.
That may not be so. For a private investor landlord of a shop property in Surbiton, I negotiated a 10% increase in rent for a September 2008 review even though the lease contains a downward provision.
The important thing to remember is that rents are not based on what the actual tenant could afford or the actual landlord might want, but upon comparison. Where the evidence is of rents whose reviews are upward-only, a nil increase (which, as I have said before, is no evidence of a lower rent) does not mean rents have fallen. Also, it is not only another rent (pro-rata) to which a review is compared, but also the terms of the lease. When you make a comparison between an upward only review clause and an upward/downwards clause, it is reasonable to assume a tenant would be attracted by the prospect of a lease containing upward/downward clause and paying a greater rent for the premises than if the review were upward only.
So, if all the evidence is nil increase, which as I've said does not mean the rent has gone down, then in the absence of proof that rents have indeed fallen, the advantage of having an upward/downward review has a value. Which in this case I agreed at 10% more.
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Many tenants, and I should imagine landlords also, probably think that where a rent review is 'upward' or 'downward' so that the rent payable after the review could be less than before, the rent is likely to go down, in the prevailing economic climate.
That may not be so. For a private investor landlord of a shop property in Surbiton, I negotiated a 10% increase in rent for a September 2008 review even though the lease contains a downward provision.
The important thing to remember is that rents are not based on what the actual tenant could afford or the actual landlord might want, but upon comparison. Where the evidence is of rents whose reviews are upward-only, a nil increase (which, as I have said before, is no evidence of a lower rent) does not mean rents have fallen. Also, it is not only another rent (pro-rata) to which a review is compared, but also the terms of the lease. When you make a comparison between an upward only review clause and an upward/downwards clause, it is reasonable to assume a tenant would be attracted by the prospect of a lease containing upward/downward clause and paying a greater rent for the premises than if the review were upward only.
So, if all the evidence is nil increase, which as I've said does not mean the rent has gone down, then in the absence of proof that rents have indeed fallen, the advantage of having an upward/downward review has a value. Which in this case I agreed at 10% more.
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