Answers to common commercial rent review questions
These FAQs provide general guidance. The wording of the individual lease and the facts of the property remain critical.
General rent review FAQs
What is a commercial rent review?
A contractual mechanism for reconsidering rent at dates specified in a commercial lease. Read more.
Does rent automatically increase at review?
No. The result depends on the mechanism and lease. Some open-market clauses are upward-only; index or fixed reviews work differently.
Is a rent review the same as a lease renewal?
No. A rent review adjusts rent under an existing lease. A lease renewal concerns the terms on which occupation continues when the existing lease expires or is renewed.
What is an open-market rent review?
A review that assesses rent by reference to the hypothetical letting required by the lease. Open-market guide.
What is an RPI-linked review?
A contractual calculation using movements in the specified Retail Prices Index. RPI guide.
Can RPI rent differ from market rent?
Yes. Indexation and open-market valuation are different mechanisms.
Lease clause FAQs
What are assumptions and disregards?
They tell the valuer what to assume and what to ignore in the hypothetical letting. Detailed guide.
Are tenant improvements included?
Not necessarily. Many clauses disregard qualifying tenant improvements. The lease and facts must be checked. Tenant improvements guide.
Is time of the essence at rent review?
This can be a legal issue and depends on the lease and circumstances. Specific legal advice should be obtained where rights depend on a deadline. Notices and time limits.
Valuation FAQs
Are asking rents comparable evidence?
They can provide context but do not have the same evidential quality as a completed transaction whose terms are known.
What is ITZA?
‘In terms of Zone A’ is a retail analysis convention that converts different parts of shop accommodation to a Zone A equivalent. ITZA explained.
Do rent-free periods matter?
Yes. Incentives can affect the effective rental analysis of a transaction.
Can a larger property be compared with a smaller one?
Potentially, but size and configuration may require adjustment and can affect the weight placed on the evidence.
Negotiation and dispute FAQs
What happens if landlord and tenant cannot agree?
The lease normally provides a dispute-resolution mechanism, commonly independent expert determination or arbitration.
What is the difference between an independent expert and arbitrator?
They perform different roles and follow different procedures. Compare the routes.
Can rent review create back rent?
Yes. If the revised rent takes effect retrospectively from the review date, a balancing payment may arise. Back rent guide.
Can interest be payable on back rent?
It may be if the lease provides for it. The wording determines the rate and calculation.
When should I appoint a surveyor?
Early advice can be useful where the proposed change is material, the clause is complex, evidence is disputed or third-party referral may be required.