Act quickly in advance of your rent review
If you’ve never approached a commercial property management company previously to deal with site acquisition or lease advice, now might be a good time to ensure you have a highly experienced property consultant to fight your corner with your landlord.
The frequency at which rent reviews take place will already be agreed within the original lease and their purpose is basically to alter the rental rate according to the current market level.
Most rent reviews take place every five years but businesses are advised to seek professional guidance before the event (at least 12 months prior to the review date) so you can plan any response. It’s also useful to monitor the rental market for comparable properties to get an idea of what is realistic and acceptable to your business. Rent reviews are usually upward-only and it’s therefore wise to prepare for this eventuality, so that you’re in the best position to negotiate a better rate.
Landlords usually provide written notice that a review is to be activated and a figure will be given for the new rent. If you disagree with the sum quoted, you must appeal immediately in writing or ask your commercial property management company to oversee the objection on your behalf. The terms of your lease may detail a deadline for any appeal against rent reviews and if you fail to meet it you could be paying over the odds until the end of your lease or the next rent review.
Peter Knight, managing director of Manchester-based commercial property management company and construction consultants Knight Site Solutions Ltd, said: “Businesses should remember that a rent review is by no means a done deal, and that bargaining or negotiation is an accepted part of this process.
“It is entirely possible that a landlord will arrive at their rental figure from looking at the highest rents in a particular area and the best premises, in other words not comparing like for like. A variety of factors affect rental value in addition to size and location of premises including the conditions of a lease and whether there is maintenance or repair liability and this information should be an influencing factor to any value changes.
“Seeking the advice of a property management specialist is the best way of negotiating your position and securing a favourable rent but make sure you act early to give them time to prepare your case.”
