For Accountants
Generally, it is unusual, at least in my experience, for an accountant to represent a landlord at rent review; but common to represent a tenant. Often, tenants, particularly smaller businesses, will turn to their accountant for advice on how best to resolve a rent review.
Although the actual tenant pays the rent and no tenant is willingly going to pay more than it can afford, in practice and where a review is to market rent (as distinct from a formula such as index-linking) the market rent is not what the actual tenant might or not be able to afford, or for that matter what rent the actual landlord wants, but how much the premises would fetch if let in the market between a hypothetical willing landlord and hypothetical willing tenant on a notional tenancy whose terms and conditions are stated in the actual lease.
Essentially, the rental valuation approach at review (and on renewal) is objective, the process depersonalised. However, as I have said, because the actual tenant pays the rent a difficulty can arise between rationally acknowledging how the process works and emotionally accepting the reality. To overcome resistance, it is often necessary for the landlord to initiate the dispute resolution procedure by referring the review to ‘arbitration’. The advantage of referral is that the rent is fixed by someone with no vested interest in the outcome.
You might think there is no point in a landlord trying to obtain more rent than the tenant could afford because that could result in the tenant going broke, the premises becoming empty and possibly difficult to re-let, but that pre-supposes the landlord thinks like that.
If you would like some general advice then please feel free to contact me, by telephone 01531 631892 or email
I look forward to helping you in some way.
Michael Lever
Generally, it is unusual, at least in my experience, for an accountant to represent a landlord at rent review; but common to represent a tenant. Often, tenants, particularly smaller businesses, will turn to their accountant for advice on how best to resolve a rent review.
Although the actual tenant pays the rent and no tenant is willingly going to pay more than it can afford, in practice and where a review is to market rent (as distinct from a formula such as index-linking) the market rent is not what the actual tenant might or not be able to afford, or for that matter what rent the actual landlord wants, but how much the premises would fetch if let in the market between a hypothetical willing landlord and hypothetical willing tenant on a notional tenancy whose terms and conditions are stated in the actual lease.
Essentially, the rental valuation approach at review (and on renewal) is objective, the process depersonalised. However, as I have said, because the actual tenant pays the rent a difficulty can arise between rationally acknowledging how the process works and emotionally accepting the reality. To overcome resistance, it is often necessary for the landlord to initiate the dispute resolution procedure by referring the review to ‘arbitration’. The advantage of referral is that the rent is fixed by someone with no vested interest in the outcome.
You might think there is no point in a landlord trying to obtain more rent than the tenant could afford because that could result in the tenant going broke, the premises becoming empty and possibly difficult to re-let, but that pre-supposes the landlord thinks like that.
If you would like some general advice then please feel free to contact me, by telephone 01531 631892 or email
I look forward to helping you in some way.
Michael Lever