D&P Holt: Ask the Expert

What happens at rent review?

Typically, the landlord will serve notice on the tenant advising that he requires an increase. It is important that the tenant responds to this notice within any stipulated time (it may be stated in the lease) if he is unhappy with the proposals.

Negotiations should then ensue.

What happens if we cannot reach agreement?

Most leases provide for the appointment of an independent surveyor, who can be appointed either by agreement of the parties, or in the absence of agreement, can be made by a nominated person, often the President of The Royal Institution of Chartered Surveyors (RICS). The surveyor can be appointed either as an Independent Expert or as an Arbitrator. Subtly different rules apply in respect of the conduct of the surveyor.

Who is qualified to act as an Arbitrator or Independent Expert?

The RICS have a panel of surveyors that the President appoints from time to time. David Holt BSc (Est Man) FRICS is on the panel and receives regular appointments for commercial property in the West Midlands and Warwickshire area, both from the President of the RICS and by direct appointment of the parties.

This is complex, what do I do?

The appointment of a commercial surveyor experienced in Landlord & Tenant and rent reviews should be considered in order to advise on the best rent that can be achieved if acting for the landlord, or equally, the lowest rent if for the tenant.

What do I do when leases expire?

Under the Landlord & Tenant Act, usually the tenant is provided with security of tenure. This effectively means that if the landlord refuses to grant consent an application can be made to the Courts for a new lease to be granted, on similar terms to the existing lease, but adopting “modern” provisions. In the event that the original lease was granted “outside the provisions of the Landlord & Tenant Act”, the tenant is unable to claim a new lease.

Can the landlord resist an application?

Yes, the landlord can resist an application and there are seven statutory grounds; the three most commonly cited are:


Landlord & Tenant	Property Management	Rating	Acquisitions

a	The terms of rent review.
b	The repairing liabilities/dilapidations (a written Schedule of Condition may be attached to the lease).
c	The user clause.
d	All other terms of the lease. A simple word can change the whole meaning of a clause!

1	The market rent at the time of review
	or;
2	Be a fixed increase
	or;
3	An increase determined by a formula, ie, a turnover rent.


1	Consult a firm of Chartered Surveyors and ask for an initial review. The cost of this should be relatively nominal
2	If the advice is that the premises are probably over assessed, then a detailed survey of the building should be undertaken by the surveyor and advice given to the client.
3	The surveyor should be instructed to serve a notice objecting to the valuation and making a proposal for a reduction. There are time constraints. Prompt action will ensure the maximum benefit is received from a successful appeal.

	The surveyor is then likely to have a meeting with the Valuation Office and will firstly check that the information is correct, ie, floor areas, etc, and will then discuss the market value appropriate. In most cases, it will be on a comparable basis, but for specialist properties, other bases can apply.


1	Industrial premises

	Presently, no rates are payable on vacant industrial premises. *Section 44a Relief* There is provision for local authorities to grant discretionary relief on PART void industrial and commercial property where the void is deemed temporary. D&P Holt have had considerable success in negotiating these allowances, but we stress that these are discretionary and are considered on a case by case basis.

2	Retail and Office premises

	50% rate voids are charged on such vacant premises after three months. but there are ways to mitigate these costs, particularly where buildings have been in multi occupation, or are unfit for commercial use. Consult D&P Holt


1	The landlord requires the premises for his own occupation.
2	The landlord wishes to redevelop the property.
3	The tenant has failed to comply with his obligations under the terms of the lease, ie, has failed to pay the rent, undertake repairs and maintenance to the building following proper notice.

1	The type of property.
2	Its location.
3	How rental values have moved in the area.


1	A general market overview and report on available properties known to D&P Holt.

2	To undertake a detailed property search setting out the specific criteria. The search will include:
	. Direct telephone calls to the leading commercial agencies in the specific area of search.
	. A mailing of the requirement to the targeted surveyors.
	. An enquiry via email to all commercial agents on D&P Holt’s extensive database within the region of the area of search
	. A "drive by" within the specified geographical area.

3	Viewing.
	Properties to be acquired for owner occupation or investment or development.