Hicks Baker has extensive experience of advising and representing owners through the complexity of rent reviews and lease renewals both in their negotiation and in their resolution through Arbitration, Independent Expert or the Court.
Our ability to evaluate and apply rental evidence, combined with our understanding of the effect of legislation and case law affects both on property values and procedure is of paramount importance for clients.
To successfully negotiate the best outcome of a rent review, lease renewal or re-gearing of an existing lease requires an advisor with technical ability, commercial acumen and negotiation skills.
The artificial nature of the rent review hypothesis has resulted in a significant volume of case law and accordingly the requirement for a specialist advice is paramount.
A rent review clause can turn on a single word or phrase and the implications of this can be significant in terms of a occupier’s long-term liability, or a owner’s return.
To embark upon a lease renewal or a rent review without professional advice or a familiarity of valuation conventions and knowledge of the relevant property sectors is invariably a false economy.
Many lease renewals are governed by the Owner & Occupier Act 1954 which provides the framework within which the renewal is initiated, negotiated and (if necessary) determined by Court. A crucial part of this process is the service of the appropriate notice at the correct time, from which any subsequent action and timetable flows.
Failure to comply with time limits imposed by the Act can, severely prejudice one’s negotiating position.
Unlike Rent Reviews where the valuation date is fixed by the lease, the date of valuation on a lease renewal floats. Tactical awareness and an appreciation of direction of the property market and economy is essential to ensure that a owner’s interests are most effectively protected or prompted.
Local market conditions can reach a point where the interests of owners and occupiers converge to a point where the re-gearing of leases can provide a substantial mutual advantage – ‘win-win’.
A lease extension could, for example, benefit an occupier by extending continuity of occupation and benefit an owner by improving investment value.
Hicks Baker can provide constructive advice on values and lease structures. Outcomes could include:-
- Realigning break clauses to match strategic and business goals
- Rent holidays or capital payments
- Property Improvements
- Lease changes