The rent review clause is the starting point for every review. It defines the contractual valuation exercise and can materially change the rent that results.
Key provisions to identify
Check the review date, review mechanism, definition of market rent, hypothetical term, permitted use, assumptions, disregards, notice provisions, third-party procedure, back-rent provisions and any interest clause.
Assumptions
An assumption tells the valuer to treat a stated circumstance as true for the hypothetical letting. Common examples concern the condition of the premises, compliance with tenant obligations and the hypothetical lease terms.
Disregards
A disregard tells the valuer to ignore something that might otherwise influence rental value. Tenant’s improvements are a common example, but the exact wording matters.
Time limits
Whether a procedural date is critical depends on the lease wording and applicable law. Specific legal advice should be obtained where rights may depend upon compliance with a notice or time limit.