Understanding Turnover Rents in Commercial Property Leases

Details

Category: Rent Monies

The basis of paying rent in a lease of commercial business premises is often a fixed amount per year with whatever rent review arrangements in the future to suitably adjust to the market level at that point or through a prescribed RPI basis in the index-linked calculation.

Whilst you may have slight differences in how this is apportioned over every quarter or charging period, it is essentially a fixed amount that everyone can budget for.

However, 'turnover rents' are different and variable year-on-year. Designed to connect the amount of rent a tenant pays to their successful trade at a property, they can be a helpful incentive for both a tenant and landlord.

But on the other side of the coin, they can get complicated.

CLICK HERE to...

Read more ...

What RPI and Index-Linked Rent Reviews Mean with Commercial Property Leases

Details

Category: Rent Monies

Rent review clauses are common in commercial property leases to re-adjust the rent every so often.

On a traditional format, this is every three or five years and on an 'open market' basis, which basically means what the local fair rent should be.

Plus, they're usually 'upwards only' rent reviews that mean the rent can only go up and not below the initial rent – great news for landlords.

However, you can come across rent review clauses that give a more certain mathematical calculation of what any rent should be rather than leaving it to people like rent review surveyors to decide what any market rent should be.

These can be still every few years, although more common on an annual basis.

Although simple in principle and practice when...

Read more ...

A Rent Review Surveyor’s Advice for Reviewing Rental Levels in Commercial Leases

Details

Category: Rent Monies

Leases of commercial properties often have a rent review clause to adjust the rent over time that can be easily missed in the focus of the main lease terms and rent right at the beginning.

And even if it is plainly agreed, years can soon go by before you're at the point of the rent being changed again.

This is where a rent review surveyor can help – someone to help get into the nitty-gritty of what this rent should be, what rights there are you to challenge it, and the procedure for going about this.

Therefore, here are seven key points to help you not only understand the principle but then easily resolve it for your situation:

CLICK HERE to immediately download a Fact Sheet document summarising 7 key aspects of commercial property...

Read more ...