CHARTERED SURVEYORS, RENT REVIEW FAQ’s
These FAQs cover a large area of specialised, technical areas of Rent and Appeals. As no two situations are the same, only the basic position is outlined. The answers do not provide a complete or authoritative statement of the law, nor do they constitute legal advice by the author. The information provided is only a snapshot: it does not create a contractual relationship nor does it form part of any other advice, whether paid or free.
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Q. When can the Landlord serve Notice on me for my new rent
A. Anytime between 12 months and 6 months before the Rent Review date.
Q. Is the Rent Review Notice a final non-negotiable document?
A. No â€“ you can state your opinion and always negotiate.
Q. Is the rent quoted negotiable?
A. Yes it’s a two way process of negotiation however much you may be bullied into sign here standing up against us would be expensive.
Q. Can the negotiations go past the Rent Review date.
A. Yes. No modern lease contains a clause that insists that time is of the essence. If it does, then you must have matters settled by the Rent Review date. However, this is very rare.
Q. Must my landlord explain his reasons for the new rent?
A. Yes. Almost all Pub Cos and Breweries have a Code of Practice which requires transparency by way of detailed explanation.
Q. Do I have to reveal my private accounts?
A. Only if the lease requires that you should. Otherwise it is a matter for your discretion rather than your landlord insisting that he wants see them.
Q. If the rent comes down, do I get back overpaid rent?
A. Yes. The new rent applies from the date of the Rent Review whenever that was and overpaid rent should always be refunded from that date.
Q. Must a rent refund be automatically credited to my rent account?
A. No, not necessarily. It can be paid to you by cheque.
Q. Can I use evidence of events after the Rent Review date?
A. Generally no as post Rent Review evidence is usually excluded.
Q. What happens if my Landlord says that I am under trading and bases his level of Fair Maintainable Trade at a higher level of trade?
A. Ask him to prove his case by detailed explanation. Never accept the catch all we think you are not up to standard and no good! They have to prove their case.
Q. Do I automatically need professional representation?
A. In the first instance, not necessarily, as you can hopefully negotiate a considerable number of items if your landlords retail field staff are being helpful and fully open and honest. However, external help can be very helpful to expose some of the dirty tricks and the bullying that can occur and also help you understand the technicalities of the rent review calculations.
Q. What happens if there is no Rent Review Notice served by the review date
A. Don’t let this happen if at all possible. Write or email your landlord in advance of the rent review date, preferably about three months before the due date and insist that they open negotiations. If the date has passed, you can always force the issue, if there are still no negotiations by instigating Third Party Referral to determine your rent under the terms of your existing lease. PIRRS will not be contained in your current lease. This is a further option for dispute resolution and is to an Independent Expert only which has its limitations. However it is sold on the basis of a low cost option which needs detailed studying in advance of electing to take that route.
Q. Must my Landlord follow a Code of Practice?
A. Yes, if they have one in existence. However, the Code of Practice is not necessarily legally binding.
Q. Must I confirm the validity of my Landlords Code of Practice by countersigning the document?
A. There is nothing in your lease that says that you have to countersign the Code of Practice if you don’t want to. If in doubt, seek legal advice.
Q. Are the RICS Rent Review Guidance Notes relevant?
A. The RICS Guidance Notes are only mandatory on Chartered Surveyors. Your landlords retail field staff are not Chartered Surveyors and although they may pay lip-service to the RICS Guidance Notes, more often than not they are either not understood or incorrectly applied.
Q. What is the usefulness of Industry Benchmarking.
A. The BBPA and AMLR both produce annual statistical reviews. They are averages and, although useful, can never be case specific. If your landlord refers to their existence, ask how they have been used in your case and how the Bench Marking has been accurately applied to the calculations.
Q. My lease says upward only rent reviews. Must this be followed?
A. All current Codes of Practice (except Wellington Pub Co), allow for upwards and downwards rent reviews which is essential in the furtherance of negotiations.
Q. I am told that my Rent Review has been calculated using my current discounts.
A. If your lease confirms the level of minimum discounting then it is that level that should apply to the calculations. If there is no mention of any discounting structure in your lease, then such discounts as you currently have are discretionary. They can disappear completely if, for example, the freehold interest is sold to someone else. Never include the benefit of trade discounts in the calculations if they are discretionary.
Q. Must the private accommodation be separated from the rest of the pub for rent purposes?
A. No. It is the whole building that is being leased to you. How you decide to split the rent for your own tax/accountancy purposes is a matter for your own discretion. It is the whole property that counts.
Q. Must machine income be taken into account?
A. Only if there is no prior sharing agreement with your landlord. If there is a side letter or an understanding that a 50:50 share of net machine income goes to your landlord, what is left over to you should not then be included as income in the rent calculations.
Note:-Leasing legislation is constantly changing, the FAQ’s make you think and wherever make you ask questions, some of the answers may be on this site already, in separate articles.
These FAQ’s are for your guidance, more complex or specific issues, you may or will need to consult a specialist.
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