{"id":121922,"date":"2018-10-26T16:57:37","date_gmt":"2018-10-26T15:57:37","guid":{"rendered":"https:\/\/startups.co.uk\/?p=121922"},"modified":"2021-11-15T14:28:58","modified_gmt":"2021-11-15T14:28:58","slug":"commercial-lease-rent-reviews","status":"publish","type":"post","link":"https:\/\/startups.co.uk\/premises\/legal\/commercial-lease-rent-reviews\/","title":{"rendered":"Rent reviews: How to handle a rent increase on your commercial lease"},"content":{"rendered":"

So, you’ve signed a commercial lease and moved your start-up into a new business premises. You know exactly how much rent you’ll be paying each quarter – but what happens when that changes?<\/p>\n

Any long-term commercial lease will likely be subject to rent reviews, during which your landlord might decide to change your rent – potentially introducing a rent increase.<\/p>\n

Of course, as a tenant, you want to keep rent on your business premises as low as possible, so it’s fortunate that you don’t have to accept your landlord’s proposed rise without debate. But it is important that you understand how to properly contest an impending rent rise, and how to negotiate effectively for a fairer rent.<\/p>\n

So, read on for everything you need to know about commercial rent reviews and how negotiating through them works…<\/p>\n

This article will cover:<\/p>\n

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  1. What a rent review is<\/a><\/li>\n
  2. How rent reviews work<\/a><\/li>\n
  3. Your rent review clause<\/a><\/li>\n
  4. Hiring an advisor<\/a><\/li>\n
  5. Researching the rental market<\/a><\/li>\n
  6. Solving rent review disputes<\/a><\/li>\n
  7. What happens after agreement<\/a><\/li>\n<\/ol>\n

    <\/a><\/p>\n

    \n

    What is a rent review?<\/span><\/h2>\n

    At regular intervals – usually every three to five years – your commercial lease will be subject to a rent review.<\/p>\n

    In other words, your landlord will value the premises and review the rent they’re charging you for it, with a view to adjusting the amount so that it better aligns with current market conditions and the state of the property.<\/p>\n

    Unfortunately, most commercial leases specify that rent can be adjusted “upwards only”, which means your rent can only either increase or stay the same with each review. Even if market prices are falling, your rent will remain static rather than decrease.<\/p>\n

    <\/a><\/p>\n

    \n

    How do rent reviews on commercial leases work?<\/span><\/h2>\n

    There are several methods by which your landlord might carry out a rent review.<\/p>\n

    The process your landlord is required to follow will be set out in the rent review clause of your commercial lease. So, to get the clearest idea of how yours will work, the best thing to do is thoroughly read that clause.<\/p>\n

    In general, though, it’s likely that your landlord will look to work out your new rent in one of two ways:<\/p>\n