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/ 07 Oct 2016

Rent Review Disputes

A rent review clause allows for the periodic adjustment (usually only upwards and usually every 3-5 years) of commercial rent to the market level at the date of the review. When the parties are unable to agree a new rent, the rent review clause in the lease will set out the procedure for review, i.e. the method of review, assumptions and disregards that should be followed when undertaking the review. The clause should also contain provisions for dealing with any disputes should they arise.

Most leases contain a clause which provides for alternative dispute resolution (ADR) which will allow an independent third party such as RICS to be appointed to assess and impose the new rent. Alternatively, the parties may decide on commencing proceedings and allowing a Judge to decide upon the level of the new rent.

As the rent review clause is likely to contain time limits and deadlines, if either party misses these they may be found to have breached the agreement.

It is in both parties’ interests to negotiate a new lease and resolve any dispute early on to avoid a dispute becoming a long and expensive process. At Hanne & Co we have experience of negotiating on behalf of both Landlords and Tenants to bring about a successful rent review.

Victoria Copeman- Solicitor

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