A commercial rent review is often agreed after the contractual review date. Where the revised rent is higher than the rent paid in the meantime, a balancing payment of back rent may become due.
When does the revised rent take effect?
This depends on the lease. In many reviews the revised rent takes effect from the review date even though the amount is agreed or determined later.
Interest
Some leases provide for interest on the balancing payment. The wording should be checked to establish whether interest is payable, the applicable rate and the period of calculation.
Budgeting for the outcome
Landlords and tenants should consider the retrospective financial effect while negotiations are continuing rather than focusing only on the future annual rent.