Commercial Property Rent Reviews: Advice for Tenants
If your landlord proposes a new rent at rent review time, you do not have to accept it without question. A commercial rent review must be carried out strictly in accordance with the terms of your lease — and many tenants pay more than they should simply because those terms are misunderstood or misapplied.
At Burt Brill & Cardens Solicitors, we advise commercial tenants and landlords on commercial rent reviews, helping ensure the process is legally compliant, fair, and based on the correct interpretation of the lease.
What Is a Commercial Rent Review?
A commercial rent review is a process built into a business lease that allows the rent to be reassessed at specified intervals during the lease term.
Most rent reviews are based on the open market rent, calculated using assumptions and disregards set out in the lease. The review does not simply reflect what neighbouring properties pay or what the landlord believes the rent should be.
What Triggers a Rent Review?
A rent review is triggered by the rent review clause in your lease. This clause sets out:
- When the rent can be reviewed (for example, every five years)
- How the new rent must be calculated
- What assumptions and disregards apply
- The mechanism for resolving disputes.
The timing and wording of this clause are critical — and often misunderstood.
How the Commercial Rent Review Process Works (Step by Step)
A typical commercial rent review process involves:
- Reviewing the lease terms
Confirming the review date, valuation method, and procedural requirements. - The landlord proposes a new rent
This is often an opening position, not a final figure. - Assessing open market rent
Usually with the assistance of a professional valuer or surveyor. - Applying assumptions and disregards
As required by the lease (for example, assuming good repair). - Negotiation between the parties
Often conducted by surveyors, with legal oversight. - Dispute resolution if no agreement is reached
Typically, by arbitration or an independent expert, as specified in the lease.
Understanding the Rent Review Clause
The rent review clause governs the entire rent review process and must be followed precisely. It outlines when a rent review can take place, how the new rent is calculated, and the rules that must be applied when assessing the figure.
Most commercial leases include:
- An upward-only rent review, meaning the rent cannot fall below the current level, even if market rents have decreased
- A requirement to assess the open market rent at the review date
- A list of assumptions, such as assuming the property is in good repair and available to let
- A list of disregards, often requiring tenant improvements or goodwill, to be ignored.
The wording of these provisions matters. Even minor drafting details — such as how “open market” is defined or which improvements must be disregarded — can significantly affect the final rent. Misinterpreting the clause can result in tenants paying more than the lease actually requires.
What Is ‘Open Market Rent’?
“Open market rent” is not simply what neighbouring tenants are paying or what the landlord believes the property is worth.
It is a hypothetical rent calculated on the basis of:
- A willing landlord and a willing tenant
- The specific terms set out in the lease
- Comparable properties in the open market
- The assumptions and disregards stated in the rent review clause.
This means the rent must be assessed in a controlled, artificial scenario defined by the lease — not based on real-world circumstances that fall outside those assumptions. Our role is to ensure the correct legal framework is applied so that the figure reflects what the lease actually allows, not an inflated or informal valuation.
When Should Tenants Challenge a Rent Increase?
Tenants are often entitled — and well advised — to challenge a proposed rent increase where the landlord’s figure does not comply with the lease.
You may wish to challenge the proposed rent if:
- Lease assumptions or disregards have been ignored or misapplied
- The proposed rent exceeds reliable market evidence
- The rent review process has not followed the procedure set out in the lease
- Key deadlines or notice provisions have been missed.
Challenging a rent early, before negotiations become entrenched or formal proceedings are triggered, often leads to better commercial outcomes and avoids unnecessary disputes.
Common Tenant Mistakes in Rent Reviews
Commercial tenants frequently make avoidable mistakes during rent reviews, including:
- Assuming the landlord’s proposed rent is correct or non-negotiable
- Missing procedural deadlines set out in the lease
- Overlooking important assumptions and disregards
- Failing to involve legal and valuation professionals at an early stage
- Treating the rent review as informal rather than a binding contractual process.
These errors can result in tenants being locked into an inflated rent for years, with limited ability to challenge it later.
How a Solicitor Helps with Commercial Rent Reviews
We support tenants throughout the commercial rent review process by:
- Interpreting complex rent review clauses
- Ensuring strict legal compliance with lease terms
- Coordinating with professional valuers and surveyors
- Advising on negotiation strategy and risk
- Protecting against procedural and timing errors
- Reducing the likelihood of costly disputes or formal proceedings.
Early legal involvement often strengthens a tenant’s negotiating position and helps ensure the final rent reflects what the lease actually permits — not simply what is demanded.
Frequently Asked Questions — Commercial Rent Reviews
Rent reviews usually take place at intervals set out in the lease, commonly every three or five years. The exact timing depends entirely on the wording of the rent review clause and cannot be assumed.
In most commercial leases, rent reviews are upward-only, meaning the rent cannot decrease even if market rents have fallen. However, not all leases are drafted this way, so it is important to check the clause carefully.
Missing the review date does not usually remove the landlord’s right to review the rent, but it can affect when the new rent becomes payable and whether backdated increases apply. Legal advice can help clarify your position.
Yes. Many leases allow the reviewed rent to be backdated to the review date once an agreement is reached. This can result in a significant lump-sum payment if negotiations take time.
Each party typically pays their own legal and valuation costs, unless the lease states otherwise. Arbitration or expert determination can involve additional costs, which may be shared or allocated depending on the outcome.
Arbitration is a formal legal process similar to court proceedings, whereas an independent expert acts more informally to determine the rent. The lease will usually specify which method applies if negotiations fail.
A rent review itself only changes the rent. Other lease terms normally remain the same unless the lease expressly allows them to be revisited or the parties agree otherwise.
Personal or business financial circumstances are usually irrelevant to a rent review. The rent is assessed based on the hypothetical assumptions in the lease, not the tenant’s actual trading position.
Yes. Surveyors assess market value and comparables, while solicitors ensure the rent review is carried out lawfully and in accordance with the lease. The two roles are complementary.
Ideally, legal advice should be taken before responding to a landlord’s proposed rent or engaging in negotiations. Early advice often leads to stronger outcomes and reduces the risk of procedural errors.
Speak to a Commercial Property Solicitor
If you are facing a commercial rent review — or have already received a proposed rent increase — early advice can protect you from unnecessary cost and risk. Call us on 01273 604123, email enquire@bbc-law.co.uk or make an enquiry to speak with a commercial property solicitor and understand your position before agreeing to new rent terms.
Burt Brill & Cardens have been incredibly helpful taking us through the journey of lease extension with minimal fuss and pain. We had heard how difficult and cumbersome it was to extend a lease. Definitely this was not our experience with Burt Brill & Cardens Solicitors being in charge.
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Speak to one of our solicitors today. We would love to hear from you and discuss any legal issues you may have and how we can assist you.
