Case History for Tenants
Cardiff - 3 St Mary Street
29/Mar/2012
For Beanfreaks, a chain of health-food shops, I advise on rent reviews and tenancy matters at its branches in Cardiff, Cwmbran, Bridgend and Newport.
Cheylesmore, Coventry
01/Oct/2011
Acting for a retailer in Cheylesmore, Coventry, I arranged referral of a rent review at 1-2 Quinton Parade to an independent expert and the revised rent was determined accordingly. (The rent devalues to Zone A £20 which at the time was the lowest in the area).
The Lease requires the tenant to pay all costs of the determination (the expert's fees) if the determination were within 10% of the landlord's proposal, so the expert took it upon himself to determine my Client should pay all costs. However, what the expert overlooked was a) the proposal was that which had been made at the date of the application to the RICS for the appointment of the expert and b) the expert's role in the procedure did not extend to responsibility for costs. At the date of my application to the RICS, the landlord had not proposed any rent so I reasoned the provision for costs did not apply. Also, I reasoned that apportioning responsibility for costs was a separate issue which was nothing whatsoever to do with the expert. It was an arrangement the parties had agreed would apply after the determination were released and not part of the actual determination process.
Needless to say, the landlord's surveyor did not agree but, because I stuck to my guns the expert found himself in an invidious position, so the landlord said he would obtain legal opinion. Whilst waiting for the lawyers, the landlord's surveyor sent me a memorandum for my Client to sign to confirm the new rent. I obtained my Client's signature but did not return the Memorandum to the landlord's surveyor for completion; instead I said that because the expert's determination on costs was included in the determination the entire determination was invalid pending resolution of the costs issue. I emphasised that whereas I was not going to recommend the revised rent should not be agreed, I did not think it should be payable until after the issue of costs was finally disposed of, so if the landlord's legal opinion did not agree with my opinion, I should arrange for my Client's solicitors to apply to the Court for a declaration. However, without prejudice, I offered to advise my Client to return the Memorandum for completion and pay the rent without further ado if the landlord would agree to pay half the expert's costs. The landlord realising the matter could take months to resolve, not to mention mounting legal costs, capitulated.
Also in Cheylesmore, instructions include:
123 Daventry Road - rent review
141 Daventry Road - lease renewal
187 Daventry Road - rent review
203 Daventry Road - lease renewal
3 Queen Isabel's Avenue - lease renewal
3 Quinton Parade - lease advice
4 Quinton Parade - lease renewal
5 Quinton Parade - lease renewal
8 Quinton Parade - lease advice and rent review
113-115 Quinton Road - rent reviews
In 2011/2012 I am advising a tenant on restructuring of the lease.
The Lease requires the tenant to pay all costs of the determination (the expert's fees) if the determination were within 10% of the landlord's proposal, so the expert took it upon himself to determine my Client should pay all costs. However, what the expert overlooked was a) the proposal was that which had been made at the date of the application to the RICS for the appointment of the expert and b) the expert's role in the procedure did not extend to responsibility for costs. At the date of my application to the RICS, the landlord had not proposed any rent so I reasoned the provision for costs did not apply. Also, I reasoned that apportioning responsibility for costs was a separate issue which was nothing whatsoever to do with the expert. It was an arrangement the parties had agreed would apply after the determination were released and not part of the actual determination process.
Needless to say, the landlord's surveyor did not agree but, because I stuck to my guns the expert found himself in an invidious position, so the landlord said he would obtain legal opinion. Whilst waiting for the lawyers, the landlord's surveyor sent me a memorandum for my Client to sign to confirm the new rent. I obtained my Client's signature but did not return the Memorandum to the landlord's surveyor for completion; instead I said that because the expert's determination on costs was included in the determination the entire determination was invalid pending resolution of the costs issue. I emphasised that whereas I was not going to recommend the revised rent should not be agreed, I did not think it should be payable until after the issue of costs was finally disposed of, so if the landlord's legal opinion did not agree with my opinion, I should arrange for my Client's solicitors to apply to the Court for a declaration. However, without prejudice, I offered to advise my Client to return the Memorandum for completion and pay the rent without further ado if the landlord would agree to pay half the expert's costs. The landlord realising the matter could take months to resolve, not to mention mounting legal costs, capitulated.
Also in Cheylesmore, instructions include:
123 Daventry Road - rent review
141 Daventry Road - lease renewal
187 Daventry Road - rent review
203 Daventry Road - lease renewal
3 Queen Isabel's Avenue - lease renewal
3 Quinton Parade - lease advice
4 Quinton Parade - lease renewal
5 Quinton Parade - lease renewal
8 Quinton Parade - lease advice and rent review
113-115 Quinton Road - rent reviews
In 2011/2012 I am advising a tenant on restructuring of the lease.
London W11 - Notting Hill Gate - t/a Subway
25/Mar/2011
The premises were let in 2004 at £50,000 per annum exclusive, for a term of 20 years, with 5 yearly rent reviews. The tenancy is outside the Landlord and Tenant Act 1954. In July 2010, the first tenant sold the business and assigned the tenancy to a new franchisee. Before the assignee took over, negotiations for the December 2009 rent review were on-going, both first tenant and the landlord professionally represented. The landlord, represented by Savills, had proposed £80,000 and after extensive negotiations including Calderbank offers the landlord wanted £72,000 pa whereas the first tenant’s surveyors were at £57,000 pa. The landlord, having initiated the dispute procedure, referred the review to an Independent Expert. Even though the assignee had only just taken over the lease, the review negotiations had reached the stage at which it was necessary to make a decision whether to agree £72,000 pa or allow the Independent Expert to proceed. The fees quoted by the first tenant’s surveyor for acting for the assignee on referral were in the region of £4000 plus VAT, excluding any fees payable to the Independent Expert if the determination of rent were at or greater than the landlord’s Calderbank offer.
The assignee contacted me and I was instructed to deal with the review including the dispute resolution proceedings. (Unlike most surveyors, I do not charge any extra for ‘going to arbitration’ and my total fee (exclusive of vat) was under half the amount that the previous tenant’s surveyor would’ve charged). Before the instruction was formally confirmed, the Landlord's Surveyor telephoned the assignee direct and intimated £60,000 per annum exclusive would be acceptable.
Some information was passed on to me but otherwise I started from scratch. I inspected the premises and made enquiries I considered necessary. The Independent Expert preliminary procedures were underway. I found several points in the interpretation of wording and phrasing of the lease that did not appear to have been explored, so I issued a Calderbank offer at £57,500 pa to protect my Client’s interest on costs. The Landlord would not accept the Calderbank offer, the Independent Expert was asked to proceed.
Acting as advocate, I presented the Independent Expert with submission of seventeen pages, 7350 words. Because the Landlord owns the entire parade in which 31 is located, together with numerous other shops in Notting Hill Gate, the Landlord’s Surveyor had all the evidence. One could have the impression the landlord was invincible. However, the Landlord's Surveyor was acting as expert witness; a role that, in my view, exposes a surveyor to a need for a considerably more accuracy and compliance with technical expectations. My counter-submission, twelve pages and 5400 words, followed by re-examination (five pages, 1800 words) of the expert witness surveyor’s reply.
The determination was £53,630 per annum exclusive; Zone a £127.50. The landlord paid all costs of the Independent Expert.
London SW13 -145 Church Road
03/Jan/2011
The premises, comprising ground floor shop and basement, are in a prominent corner position at the junction of Castelnau and Church Road.
I have acted for the tenant, Raff Radio (Barnes), since 1995. and have dealt with rent reviews, lease renewal and matters arising following the exercising of a tenant break-clause in 2009, when the Schedule of Dilapidations landlord; claim for damages was reduced from about £30,000 to £12,000.
I have acted for the tenant, Raff Radio (Barnes), since 1995. and have dealt with rent reviews, lease renewal and matters arising following the exercising of a tenant break-clause in 2009, when the Schedule of Dilapidations landlord; claim for damages was reduced from about £30,000 to £12,000.
London W1 - Piccadilly Circus saving £97,000 pa
29/Mar/2010
Acting for the Tenant of 8 Glasshouse Street, London W1,
I negotiated the rent review 24 June 2002 and on expiry of the tenancy in 2008/2010
Landlord: Land Securities PLC
Landlord's Surveyors: Drivers Jonas.
The rent was £93,000 per annum and the Landlord's proposal was £222,000 per annum.
The Landlord referred the matter to arbitration, but proceedings were not pursued. I negotiated agreement at £125,000 per annum.
A saving of £97,000 per annum
On expiry of the tenancy in 2008, the landlord did not oppose renewal but wanted the renewal lease to contain a break clause for redevelopment. I advised the Tenant on aspects of the procedure and terms for agreement.
I negotiated the rent review 24 June 2002 and on expiry of the tenancy in 2008/2010
Landlord: Land Securities PLC
Landlord's Surveyors: Drivers Jonas.
The rent was £93,000 per annum and the Landlord's proposal was £222,000 per annum.
The Landlord referred the matter to arbitration, but proceedings were not pursued. I negotiated agreement at £125,000 per annum.
A saving of £97,000 per annum
On expiry of the tenancy in 2008, the landlord did not oppose renewal but wanted the renewal lease to contain a break clause for redevelopment. I advised the Tenant on aspects of the procedure and terms for agreement.
Southsea - 38-40 Kent road - pub rent reduced by £11,500 a year
11/Feb/2010
The property at 38-40 Kent Road is a substantial Grade II listed building of approximately 10,000 sqft arranged on basement, ground and three upper floors.
The building was let for 30 years from 1999 with rent reviews per FMR. When the Tenant took over the lease, the Landlord was a pub-co, but in 2007 the freehold was sold to a property investment and development company. The new landlord served a release notice and instructed Savills, to deal with the rent review. The proposal was £65,000 pa, with a subsequent Calderbank at a slightly lower figure.
Before the tenant instructed me, the tenant had engaged the services of a well-known chartered surveyor in the field of licensed premises rent review and valuations. Negotiations took place with Savills and an arbitrator appointed, but for various reasons that surveyor could no longer deal with the matter, so I was instructed at short notice, the closing date for the arbitration just a week or so later. I agreed an extension to the closing date for submission, also I queried the rent review date which resulted in a 3 day difference in favour of the tenant. I presented a written submission as an advocate and cross-examined the landlord's expert witness report. The award at £53,500 pa was lower than the Calderbank.
The building was let for 30 years from 1999 with rent reviews per FMR. When the Tenant took over the lease, the Landlord was a pub-co, but in 2007 the freehold was sold to a property investment and development company. The new landlord served a release notice and instructed Savills, to deal with the rent review. The proposal was £65,000 pa, with a subsequent Calderbank at a slightly lower figure.
Before the tenant instructed me, the tenant had engaged the services of a well-known chartered surveyor in the field of licensed premises rent review and valuations. Negotiations took place with Savills and an arbitrator appointed, but for various reasons that surveyor could no longer deal with the matter, so I was instructed at short notice, the closing date for the arbitration just a week or so later. I agreed an extension to the closing date for submission, also I queried the rent review date which resulted in a 3 day difference in favour of the tenant. I presented a written submission as an advocate and cross-examined the landlord's expert witness report. The award at £53,500 pa was lower than the Calderbank.
London W1 - 49 Eastcastle Street
29/Sep/2009
Before I was instructed, the Landlord had referred the matter to arbitration. The matter was resolved without involving the arbitrator much. Getty Images at 46 Eastcastle Street, a few doors away in the same block owned by the same landlord, had had a rent review in 2009 where the agreed rent had been devalued at about Zone A £100 or so. I devalue the rent of 49 at under £90 Zone A.
For the same Client, I had negotiated the rent review of their premises at 57A Dean Street, London W1
Formby, Liverpool - The Cloisters
29/Sep/2009
My Client-tenant is Satterthwaites. The premises, located at the back of the centre facing the customer car park, used to be on two separate leases but in 2003 I negotiating terms for merging them into one. I deal with the rent reviews and matters arising.
Biddulph - 44 and 46 High Street
01/Sep/2009
Sainsbury's developed a supermarket in Biddulph, Staffordshire
Part of the site included a parade of shops, with flats above, where I acting for two retailers - SW Cotton, Optician at 44/44a High Street, and Morning Fresh greengrocer at 46/46a High Street - in negotiations for surrender of their leases to Sainsbury's, subject to simultaneous leaseback for a few months until vacant possession was required.
For 44/44a I negotiated almost twice as much as Sainsbury's offered originally. For the lease of 46/46a, I negotiated almost three times as much.
Part of the site included a parade of shops, with flats above, where I acting for two retailers - SW Cotton, Optician at 44/44a High Street, and Morning Fresh greengrocer at 46/46a High Street - in negotiations for surrender of their leases to Sainsbury's, subject to simultaneous leaseback for a few months until vacant possession was required.
For 44/44a I negotiated almost twice as much as Sainsbury's offered originally. For the lease of 46/46a, I negotiated almost three times as much.
Bury St Edmunds - Anglian Lane: saving £87,000 pa
16/Jul/2009
My Client is a successful retailer in East Anglia, and this branch is on an under-lease from Homebase Ltd. Like many large companies, Homebase has a residual estate: numerous properties that it used to occupy, but which have long since been conveyed to others. (According to April 2009 accounts, in the public domain, the parent company of Homebase, Home Retail Group plc, made £117.3M provision for onerous lease charges. The past catches up!) In this case, Homebase wanted to assign its lease with an indemnity for the remainder of the term for a difference in repairing covenants, so my Client would be no worse off.
Terms were agreed in principle. At the onset, I said I should not recommend my Client instruct solicitors until the freeholder’s consent had been obtained. The head-lease contains a surrender-back clause, also I did not want my Client to incur costs unnecessarily. Homebase applied for a licence to assign, a draft was submitted by the freeholder’s solicitors, and I was told by the surveyor acting for Homebase consent had been given. However, what was not disclosed until much later on was that the freeholder had not actually given consent, because it was still awaiting reply to its enquiries about my Client’s accounts. [Whether the freeholder’s solicitors, in having issued a draft licence, was enough to deem consent was never resolved: that would’ve meant applying to court for a declaration, which Homebase would do provided contracts to assign were first exchanged, (on condition if the application failed then the transaction would abort)]
As the conveyancing progressed, I started thinking further ahead. Even if the freeholder were shown to be unreasonably withholding consent, I felt my Client would be off to a bad start if the landlord were ordered to consent against its will. No matter the business tenancy law, the human element in the ongoing relationship between landlord and tenant is important. Then there was the question of personal surety. The underlessee has no surety, which would mean, on expiry of the head-lease when Homebase’s interest ends, and the under-lease is renewed direct with the freeholder, there would be no need for surety in future. (The under-lease is inside the 1954 Act so has renewal rights.) In the head-lease, the freeholder can require personal surety for a ltd company assignee. My Client offered an associate company, but not a personal surety. Had the matter gone to court, it is possible the court would have ordered a personal surety with any licence to be granted, which would mean my Client worse off.
The difference in repairing covenant could also cause problems. The under-lease contains a schedule of condition, whereas the head-lease is full repairing. The cost of the difference is estimated at £100,000, at least. I got Homebase to agree to extend the indemnity beyond expiry of the term into any holding-over period, but that benefit would only have practical effect if the freeholder were to serve a schedule of dilapidations whilst Homebase were around. There would be nothing to stop the freeholder waiting until Homebase were completely out of the picture before serving it on my Client. Similarly, if my Client did not want to renew, then its terminal obligation would be limited. Also, by taking on the head-lease, the under-lease could have been extinguished, losing the benefit in having the schedule of condition continue on renewal of the lease direct with the freeholder.
I concluded the risks outweighed the benefits, so I recommended withdrawing from the transaction.
I have agreed the 2003 and 2009 rent reviews at nil increase, a saving of about £87,000 pa.
Terms were agreed in principle. At the onset, I said I should not recommend my Client instruct solicitors until the freeholder’s consent had been obtained. The head-lease contains a surrender-back clause, also I did not want my Client to incur costs unnecessarily. Homebase applied for a licence to assign, a draft was submitted by the freeholder’s solicitors, and I was told by the surveyor acting for Homebase consent had been given. However, what was not disclosed until much later on was that the freeholder had not actually given consent, because it was still awaiting reply to its enquiries about my Client’s accounts. [Whether the freeholder’s solicitors, in having issued a draft licence, was enough to deem consent was never resolved: that would’ve meant applying to court for a declaration, which Homebase would do provided contracts to assign were first exchanged, (on condition if the application failed then the transaction would abort)]
As the conveyancing progressed, I started thinking further ahead. Even if the freeholder were shown to be unreasonably withholding consent, I felt my Client would be off to a bad start if the landlord were ordered to consent against its will. No matter the business tenancy law, the human element in the ongoing relationship between landlord and tenant is important. Then there was the question of personal surety. The underlessee has no surety, which would mean, on expiry of the head-lease when Homebase’s interest ends, and the under-lease is renewed direct with the freeholder, there would be no need for surety in future. (The under-lease is inside the 1954 Act so has renewal rights.) In the head-lease, the freeholder can require personal surety for a ltd company assignee. My Client offered an associate company, but not a personal surety. Had the matter gone to court, it is possible the court would have ordered a personal surety with any licence to be granted, which would mean my Client worse off.
The difference in repairing covenant could also cause problems. The under-lease contains a schedule of condition, whereas the head-lease is full repairing. The cost of the difference is estimated at £100,000, at least. I got Homebase to agree to extend the indemnity beyond expiry of the term into any holding-over period, but that benefit would only have practical effect if the freeholder were to serve a schedule of dilapidations whilst Homebase were around. There would be nothing to stop the freeholder waiting until Homebase were completely out of the picture before serving it on my Client. Similarly, if my Client did not want to renew, then its terminal obligation would be limited. Also, by taking on the head-lease, the under-lease could have been extinguished, losing the benefit in having the schedule of condition continue on renewal of the lease direct with the freeholder.
I concluded the risks outweighed the benefits, so I recommended withdrawing from the transaction.
I have agreed the 2003 and 2009 rent reviews at nil increase, a saving of about £87,000 pa.
St Ives, Cambridgeshire - 8-9 Market Hill
14/May/2009
For the tenant, I negotiated the 1997, 2002 and 2007 rent reviews at 8-9 Market Hill.
The building is let to Safeway supermarket, nowadays owned by Morrisons. My Client took an underlease of the shop part of the building In 1996, and for the 1997 review negotiations were synchronised with the headlease review between Safeway and the superior landlord.
For the 2002 review, by which time Morrisons had taken over Safeway, the landlord's surveyor wanted more rent pro-rata, so the review was referred to an independent expert for determination. The reasoning provided a precedent for the 2007 review.
Re business rates, on appeal to the Valuation Office, I obtained a reduction in the 2005 Rateable Value.
The building is let to Safeway supermarket, nowadays owned by Morrisons. My Client took an underlease of the shop part of the building In 1996, and for the 1997 review negotiations were synchronised with the headlease review between Safeway and the superior landlord.
For the 2002 review, by which time Morrisons had taken over Safeway, the landlord's surveyor wanted more rent pro-rata, so the review was referred to an independent expert for determination. The reasoning provided a precedent for the 2007 review.
Re business rates, on appeal to the Valuation Office, I obtained a reduction in the 2005 Rateable Value.
Warwick - 45a Coten Road
13/Mar/2009
45a Coten Road is a shop and upper part in a main road position almost opposite Sainsbury's Local. In 2009, I provided an expert report of value for a negligence claim involving a solicitor’s failure to protect renewal rights on expiry of the lease.
Northampton - 26-28 The Drapery
25/Dec/2008
The premises are almost opposite Debenhams.
The Tenant, t/a Pumpernickels, had been negotiating the rent review June 2006 direct with the landlord's surveyors. The 2001 passing rent was £30,000 pa and for the 2006 review the landlord's proposal £40,500 per annum. Following negotiations the landlord made a Calderbank offer to settle at £33,750 pa. The Tenant instructed me to take over negotiations and I settled the rent at £31,000 per annum; the matter was finally agreed in December 2008.
The Tenant, t/a Pumpernickels, had been negotiating the rent review June 2006 direct with the landlord's surveyors. The 2001 passing rent was £30,000 pa and for the 2006 review the landlord's proposal £40,500 per annum. Following negotiations the landlord made a Calderbank offer to settle at £33,750 pa. The Tenant instructed me to take over negotiations and I settled the rent at £31,000 per annum; the matter was finally agreed in December 2008.
London SE1 - 178 Lambeth Road
24/Dec/2008
A cafe/restaurant with flats above, the property occupies a prominent corner in an isolated trading position.
I acted for the Tenant re the 2008 review. The landlord's proposal was £34,000 pa. I served the counter-notice to prevent the proposal becoming binding, then negotiated a reduction of £11,000 per annum.
I acted for the Tenant re the 2008 review. The landlord's proposal was £34,000 pa. I served the counter-notice to prevent the proposal becoming binding, then negotiated a reduction of £11,000 per annum.
Trowbridge - The Shires
01/Oct/2008
Acting for Special Occasions*, the well-respected greeting cards retailer, I negotiated acquisition of a new lease at 39 The Shires, Trowbridge, for a term of 10 years from October 2008.
*Special Occasions is an award-winning family owned and run company with 14 shops in the Cotswold and Welsh Border areas. They sell greetings cards and a wide range of gifts in all their shops and Thorntons chocolates in 12 of the shops. I have acted for the company for many years, since it had 4 shops.
*Special Occasions is an award-winning family owned and run company with 14 shops in the Cotswold and Welsh Border areas. They sell greetings cards and a wide range of gifts in all their shops and Thorntons chocolates in 12 of the shops. I have acted for the company for many years, since it had 4 shops.
London SE1 - 62-64 Weston Street
29/Sep/2008
The Tenant, t/a Champor-Champor, an award-winning modern Malaysian restaurant close to London Bridge Station, instructed me deal with the 2008 rent review.
The Landlord owned numerous buildings in the area and the proposal of £34,000 was based on its evidence.
The Lease contained a minimum uplift to £28,000 pa so I was unable to reduce the rent below that figure, but I made sure the tenant did not have to pay a penny more.
Subsequently, the Tenant sold the business, the lease was restructured, and the landlord sold the investment at auction.
The Landlord owned numerous buildings in the area and the proposal of £34,000 was based on its evidence.
The Lease contained a minimum uplift to £28,000 pa so I was unable to reduce the rent below that figure, but I made sure the tenant did not have to pay a penny more.
Subsequently, the Tenant sold the business, the lease was restructured, and the landlord sold the investment at auction.
Hunstanton - 8-16 High Street
29/Sep/2008
My Client, t/a Warehouse Clearance, has acquired the lease of 8-16 High Street, Hunstanton - formerly occupied by Woolworths - from the administrator of Woolworths. Before contracts were exchanged for the sale of the lease, I advised on the terms and conditions of the existing lease so that my Client would know what it would be letting itself in for. Thereafter, I negotiated the outstanding rent review with the Landlord.
The lease has since been assigned to Mackays Stores
In Hunstanton, I have also advised on:
24 High Street
1 Northgate Precinct
St Edmunds Terrace
The lease has since been assigned to Mackays Stores
In Hunstanton, I have also advised on:
24 High Street
1 Northgate Precinct
St Edmunds Terrace
Stroud - 24 Merrywalks Shopping Centre
19/Mar/2008
F Hinds Ltd, the jewellers, instructed me to negotiate the rent review 29 September 2000 at its branch in the Merrywalks Centre, Stroud, Gloucestershire.
The rent was £21,500 per annum and, for various reasons, the review was up or down. The Landlord's Surveyors, Johnson Fellows, offered to settle at £19,750 pa. I referred the matter to arbitration so as to present a submission to someone with no vested in the outcome.
The Award was £15,000 pa: a saving of £6500 per annum.
For the September 2005 review, F Hinds Ltd started negotiations direct with the Landlord's surveyors, this time, Alder King. The proposal was £28,500 per annum but, before I was instructed, the Landlord had offered compromise at £26,000 pa. This time, the Landlord had applied for arbitration. A different arbitrator to last time was appointed. On my recommendation, the arbitration proceeded.
The Award was £24,675 per annum: a saving of £1325 per annum.
To verify the comparable information presented to me, I measured many of the shops in Merrywalks Centre.
The rent was £21,500 per annum and, for various reasons, the review was up or down. The Landlord's Surveyors, Johnson Fellows, offered to settle at £19,750 pa. I referred the matter to arbitration so as to present a submission to someone with no vested in the outcome.
The Award was £15,000 pa: a saving of £6500 per annum.
For the September 2005 review, F Hinds Ltd started negotiations direct with the Landlord's surveyors, this time, Alder King. The proposal was £28,500 per annum but, before I was instructed, the Landlord had offered compromise at £26,000 pa. This time, the Landlord had applied for arbitration. A different arbitrator to last time was appointed. On my recommendation, the arbitration proceeded.
The Award was £24,675 per annum: a saving of £1325 per annum.
To verify the comparable information presented to me, I measured many of the shops in Merrywalks Centre.
Salford - 263 Great Cheetham Street - dental surgery
28/Feb/2008
For the tenant, a dentist, I was instructed to negotiate the 2008 rent review at 263 Great Cheetham Street East, Salford.
Before I was instructed, the tenant had tried to get the landlord, the Council of the City of Salford, to reduce the rent but the figure the landlord would agree was still considered too much. During negotiations, I discovered that the lease had not been completed which meant that, although my Client has a tenancy, the rent review could not be operated.
After much consideration, the review was agreed at a nominal increase, to avoid the complication that could ensue.
Before I was instructed, the tenant had tried to get the landlord, the Council of the City of Salford, to reduce the rent but the figure the landlord would agree was still considered too much. During negotiations, I discovered that the lease had not been completed which meant that, although my Client has a tenancy, the rent review could not be operated.
After much consideration, the review was agreed at a nominal increase, to avoid the complication that could ensue.
Northampton - 13 Weston Favell Shopping Centre
17/Apr/2007
Acting for Nolan's Jewellers in Weston Favell Shopping Centre, Northampton, the rent was £25,500 per annum and for the July 2004 review the Landlord, The Tesco British Land Property Partnership, proposed £58,800 per annum, based on an open market new letting nearby.
(Every little helps Tesco!) To put pressure, Tesco referred the matter to an independent expert, but the matter was held in abeyance. Initially, the lowest I could persuade the Landlord to accept was £45,500 pa, but, after the freehold of the Centre was sold, I negotiated with the surveyors for the new Landlord and the rent was agreed at £35,000 per annum.
A saving of £23,800 per annum.
(Every little helps Tesco!) To put pressure, Tesco referred the matter to an independent expert, but the matter was held in abeyance. Initially, the lowest I could persuade the Landlord to accept was £45,500 pa, but, after the freehold of the Centre was sold, I negotiated with the surveyors for the new Landlord and the rent was agreed at £35,000 per annum.
A saving of £23,800 per annum.
London W14 - 8 Charleville Road
01/Oct/2003
Acting for the Tenant of a restaurant with a self-contained flat in West Kensington, London W14, for the rent review in 2003 the Landlord rent proposed £27,250 pa, up from £9500 pa. The reasoning centred on 1) failure by the tenant to obtain landlord’s consent for alterations, 2), whether the works were, in compliance with statutory requirements, an obligation to the landlord, 3) the value of the flat.
Following my involvement, the landlord’s surveyor reduced the proposal to £20,000 pa, and threatened referral to an independent expert if my Client would not agree. I recommended my Client to not agree. We appointed an Independent Expert by choice, requesting a reasoned determination.
After representations, the Expert accepted that, whereas the tenant had not obtained consent for alterations and the lease prohibited alterations, the landlord could be said to have acquiesced; also the works were voluntary. A premium rent for the A3 use was rejected since the use clause stated any use within Class A. My approach to valuing the flat achieved 60% discount. The determination was £13,740 pa and a delighted Client.
Before letting me approach the matter my way, the tenant urged me to promote the sympathetic line, plying the landlord with information I should never have disclosed. People often judge my character wrongly. I am not noted for my positive style so sometimes clients want to take charge of the negotiations without understanding that their approach would likely fail. Perhaps a reflection of popular opinion amongst many tenants that reasonable people should be able to reach an acceptable outcome, without involving surveyors. Affable overly perhaps, but landlords are not necessarily reasonable.
To ignore the lease and focus on rent departs from how reviews are done and often exposes the tenant to unnecessary compromise. A review is not about give and take, but quantification of what is written. The onus is on the landlord’s side to draft, the tenant’s side to approve the lease. A landlord cannot have it both ways, but a tenant can. If the landlord manages the relationship casually or the lease contains points prejudicial to investment, then tough. The advantage of referral is to circumvent the opponent’s stance and focus on lease analysis and valuation. Provided reasoning is unemotional, a technical presentation to expert or arbitrator can be a better bet. In this case, the extra total cost to the tenant, including my fees, was approximately 20% of the saving; a small price to pay for enhancing the marketability of the business.