Important 2026 development — but the new regime is not yet in force.
The English Devolution and Community Empowerment Act 2026 received Royal Assent on 29 April 2026. Part 5 and Schedule 37 provide the legislative framework intended to restrict upwards-only rent review provisions in relevant business tenancies in England and Wales. However, RICS has expressly stated that the ban itself is not yet operative: secondary legislation will deal with the detail, and RICS does not expect implementation before 2027 at the earliest.
Current position at September 2026
Do not assume that an existing upwards-only rent review clause has ceased to apply. The commencement provisions, transitional arrangements, the date and nature of the lease or renewal arrangements, and future secondary legislation all matter. Specific legal advice should be obtained where the enforceability of a clause is in issue.
What is an upwards-only rent review?
Traditionally, many commercial leases provide that the reviewed rent is the higher of the existing passing rent and the market rent calculated at the review date. In a falling market this prevents the rent reducing even where the open-market calculation would produce a lower figure.
What has changed?
The 2026 Act inserts a new section 54A and new Schedules 7A and 7B into the Landlord and Tenant Act 1954. The legislation is designed so that, once the relevant provisions are commenced and subject to the detailed rules and exceptions, a rent review term cannot simply force the new passing rent above the objective reference amount produced by the review mechanism.
Which rent review mechanisms are relevant?
The statutory framework is drafted more broadly than conventional open-market reviews. The reference amount can involve inflation or another index/multiplier, actual or hypothetical market rent, or turnover. The legislation also gives the Secretary of State power to make exceptions, with the official explanatory notes specifically identifying caps and collars as an example of an area that regulations could address.
Does this affect existing leases?
The Act contains important transitional protection. Broadly, the new Schedule applies to business tenancies granted, or varied to include relevant rent review terms, after the Schedule comes into force, unless the grant or variation is made under protected pre-commencement arrangements. The detailed provisions should be checked rather than treating the change as a blanket retrospective rewriting of existing leases.
What about lease renewals?
This is particularly important. RICS highlights a retrospective element: where a renewal option or similar renewal arrangement was entered into on or after 17 March 2026, the resulting renewal lease may be caught by the new regime notwithstanding the wider commencement arrangements. The statutory wording and the particular renewal documentation require legal analysis.
What are the practical implications?
For tenants: once implemented, qualifying reviews may be capable of producing a lower passing rent where the contractual reference mechanism produces a lower figure, rather than automatically being floored at the existing rent.
For landlords and investors: the change may affect assumptions about future rental growth, income certainty, valuation and lease structuring. RICS has raised concerns about potential effects on investment confidence and property values and advises members involved in lease structuring, valuation and investment appraisal to review existing assumptions.
For surveyors: it will become increasingly important to establish when the lease or renewal arrangements were entered into, when the relevant provisions commenced, what the review mechanism actually produces and whether any exception or transitional protection applies.
Authoritative sources
This page is deliberately based on primary and professional sources. For the current position see RICS: response to the English Devolution and Community Empowerment Act 2026, the English Devolution and Community Empowerment Act 2026 and the Act’s official explanatory notes on Schedule 37.
Keep checking the position
This is a developing area. Secondary legislation and commencement provisions will determine important practical details. CommercialRentReview.com will update this guide as the implementation framework develops.
Important: This page provides general information only and is not legal advice. Parties considering a new lease, renewal, variation or the enforceability of a particular rent review provision should obtain appropriate legal advice.