#10259 - Lease Rent Review Provisions Annotated - Property Law and Practice

SCHEDULE 2: THE RENT AND RENT REVIEW

2-1 Meaning of 'Open Market Rent'

For the purpose of this Lease 'Open Market Rent' means the best rent at which the Premises might be let on the open market as a whole or in parts (whichever shall produce the higher rent) on the relevant Review Date by a willing landlord to a willing tenant without any premium and with vacant possession of the whole and subject to the provisions of this Lease (excluding the provisions relating to rent but including the provisions for review of rent) as varied from time to time for a term equal to 15 years commencing on the relevant Review Date the unexpired residue of the Contractual Term at the relevant Review Date but,

2-1.1 Assumptions

on the assumption that at the relevant Review Date:

2-1.1.1 the Premises are in a physical state to enable them be lawfully used by the willing tenant (or any assignee of the willing tenant) for any purpose permitted by this Lease,

2-1.1.2 no work has been carried out to the Premises by the Tenant its sub-tenants or their predecessors in title during the Term which has diminished the rental value of the Premises,

2-1.1.3 if the Premises have been destroyed or damaged they have been fully restored, and

2-1.1.4 the Tenant's Covenants and the Landlord's Covenants have been fully complied with,

2-1.2 Disregards

but disregarding:

2-1.2.1 any effect on rent of the fact that the Tenant or its predecessors in title have been in occupation of the Premises,

2-1.2.2 any goodwill attached to the Premises arising out of the business of the Tenant or its predecessors in title in their respective businesses, and

2-1.2.3 any effect on rent attributable to any improvement to the Premises carried out before or after the date of this Lease by or at the expense of the Tenant

2-2 Rent Review

At each Review Date the Rent will be reviewed in accordance with the provisions of this Schedule and from and after each Review Date the Rent will be the greater of the Rent payable (or which would be payable but for the provisions of clause 5.5 SUSPENSION OF RENT) immediately before the relevant Review Date and the Open Market Rent on the relevant Review Date

2-3 Fixing the Reviewed Rent

2-3.1 The revised rent for any review period may be agreed in writing at any time between the Landlord and the Tenant or (in the absence of agreement) determined not earlier than the relevant Review Date by an arbitrator of recognised standing and having experience in letting and valuing property of a like kind and character to the Premises to be appointed (on the application of either the Landlord or the Tenant) by the President of the Royal Institution of Chartered Surveyors.

2-3.2 Any arbitration conducted under this schedule will be conducted in accordance with the Arbitration Act 1996.

2-3.3 If the arbitrator appointed to conduct any arbitration under this schedule fails or refuses to accept his appointment or fails to make an assessment or if he relinquishes his appointment or dies or if he is unable or unwilling to complete his duties then the Landlord or the Tenant may apply to the then President of the Royal Institution of Chartered Surveyors for a substitute to be appointed in his place.

2- 4 Memoranda of Revised Rent

When the revised Rent has been ascertained memoranda will be signed by or on behalf of the Landlord and the Tenant and annexed to this lease and its counterpart the Landlord and the Tenant bearing the cost of the preparation of such memoranda equally.

2-5 Payment on Account Pending Determination

If the revised Rent payable from any Review Date has not been ascertained by the relevant Review Date the Tenant must continue to pay rent at the rate equal to the Rent payable immediately before the relevant Review Date (such payments being on account of the Rent for the next ensuing rental period) until the revised Rent has been ascertained and for the purposes of this schedule the Rent for the relevant period will be deemed to have been ascertained on the date when it is agreed in writing between the parties or as the case may be on the date of the arbitrator’s award.

2-6 Payment on Determination

As soon as the revised Rent for the relevant period has been ascertained the Tenant must pay to the Landlord by way of rent the aggregate of the amounts by which the installments of the Rent payable on account in accordance with paragraph 2-5 of this schedule fall short of the amounts which would have been payable if the Rent for that period had been ascertained on or before the relevant Review Date together with Interest from the relevant Review Date until the date of actual payment to the Landlord.

2-7 Statutory Rent Restriction

If at any of the Review Dates any statute restricts the Landlord’s right to review rent the Landlord may when such restriction is removed or modified on giving not less than one month’s notice in writing to the Tenant proceed to review the Rent in respect of any review where the Landlord’s right was restricted and the date of service of the notice will be deemed for the purposes of this paragraph to be a Review Date (providing that nothing in this paragraph may be construed as varying any subsequent Review Dates) and the Landlord will be entitled to recover any resulting increase in Rent with effect from such date as may then be permitted by law

1. “best rent" should be changed to “open market rent” as otherwise the value could consider the presence in the market of a special bidder willing to pay in excess to secure the property and this will skew the rent upwards, which will be adverse to T. P.284

2. If the T is ONLY allowed to assign the WHOLE of the premises and CANNOT assign PART this clause is unfair. This review fixes rent on more flexible terms, beneficial to the LL (i.e. the property will rent higher if let “in part”...