Rent review assessment

Asses the fairness of a rent review

Upon exercising an Option, there is generally a rent review to market to be undertaken by the landlord. A tenant may require, under the Retail Leases Act, a determination of the market review before an exercise of Option takes place, within a certain time frame (usually 6 – 9 months before the Lease expires). If the tenant does not agree with the landlord’s determination, then the matter can be referred to Independent Valuation.

Determining what is a fair market increase is often a source of contention. A landlord always wants his rent to increase while a tenant wants the opposite. A difference of opinion often occurs which requires delicate diplomatic handling so as not to escalate the issue.

The landlord can be asked to provide evidence of comparable rents to justify the increase he seeks. This evidence does not have to be provided unless it goes to independent Valuation. The tenant may have to seek his own evidence of comparable rents. This task is not easy as this information is often very hard to find. Comparable rents for a similar size shop, in a similar location and being used for a similar use can be difficult to find. Retail Lease Solutions, with access to the latest leasing information and to qualified Valuers who can supply additional information, can advise you very quickly.