Rent reviews are a central feature of commercial property leases and play a significant role in shaping the long-term financial performance of an investment. For landlords they offer a means of preserving or enhancing income in line with market conditions. For tenants they represent a key point of negotiation that can influence operational costs, business stability and future planning. A clear understanding of how rent reviews operate, the mechanisms available and the common pitfalls to avoid is essential for anyone entering or managing a commercial lease.

  1. The Purpose and Mechanics of Rent Reviews

Rent reviews are intended to ensure that rental values remain commercially appropriate throughout the term of the lease. In most cases this is achieved by linking rent to market conditions, though there are several recognised mechanisms. A well drafted lease should set out:

  • The review method for example open market, index linked or fixed increase
    • The valuation assumptions to be adopted
    • The review dates and procedural steps required
    • How disputes are to be resolved whether by surveyor determination or arbitration

These provisions provide structure and predictability which help both parties budget effectively and reduce the risk of disagreements at a later date.

  1. Common Rent Review Models

The choice of review mechanism will depend on the nature of the property, market conditions and the commercial priorities of the parties. The most frequently used models include:

  • Open market rent reviews, which adjust rent to reflect prevailing market levels based on comparable evidence
  • Index linked reviews, often tied to the Retail Prices Index or Consumer Prices Index, providing steady and predictable uplifts
  • Stepped or fixed increases, offering certainty and simplicity, often favoured in shorter or more bespoke arrangements

Each approach has its advantages and limitations. Open market reviews respond directly to local demand but may create uncertainty, whereas indexed reviews provide stability but may not fully reflect rental value in rapidly changing markets.

  1. Preparation and Negotiation

Effective preparation is essential. Landlords should ensure they have robust evidence to support their proposed valuation including comparable lettings, yield trends and any improvements to the property. Tenants should take an equally informed approach, reviewing the lease carefully and commissioning professional valuation advice where appropriate. Matters to consider include:

  • The state of repair and whether tenant improvements should be disregarded
    • Assumptions and disregards that may affect the valuation
    • Whether any break clauses, restrictions or unusual lease terms influence marketability

A proactive dialogue between the parties, supported by specialist advice, often leads to a swifter and more commercially balanced agreement.

Common Pitfalls to Avoid

Rent reviews can become contentious if key issues are overlooked. Common mistakes include:

  • Missing review deadlines, which can undermine negotiation strength
  • Accepting valuations unsupported by evidence
  • Misunderstanding assumptions in the lease which can materially alter the outcome
  • Failing to consider dispute resolution options at the outset

Early review of the lease and timely professional advice can prevent these issues from escalating.

How Ison Harrison Can Help

Our Commercial Property team provides comprehensive support for both landlords and tenants involved in rent reviews. We assist with:

  • Interpreting rent review clauses and advising on your rights
  • Conducting negotiations and managing the review process
  • Advising on independent expert or arbitration procedures
  • Drafting leases with clear and future-proof rent review provisions

Our approach combines legal precision with commercial realism to achieve balanced and sustainable outcomes.

Discuss your upcoming rent review

Whether you are preparing for an upcoming review or seeking guidance on structuring rent reviews in a new lease, our specialist solicitors are ready to assist.

Call 0113 284 5000 or email commprop@isonharrison.co.uk for clear, practical and commercially focused advice.