Rent Reviews and Rating Assessments

2. Negotiating a Market Rent

At a rent review your landlord will naturally want to set the new rent as high as possible. To strengthen your negotiating position, you need clear evidence to show that the new rent proposed is unreasonably high.

2.1 Collect information on the rents charged for similar premises in the area.

• In a shared building, ask your fellow tenants what they are paying.
• Most commercial estate agents are quick to provide details of properties to let, if they think you may be a potential tenant.
• Obtaining details of the rents that have actually been agreed is more difficult. You may be able to reach an agreement to swap information with the tenants.

2.2 Form your own estimate of the open market value of your premises.

• When analysing the rent of other premises, make any necessary adjustments for incentives (or premiums). For example, if a three-year lease includes one year rent-free, the real rent is two thirds of the 'headline rent'.

2.3 Try to reach a settlement with your landlord at this stage.

• If local rent levels are collapsing, consider proceeding more slowly. But observe any time limits set out in the lease.
• If you are in shared premises, consider negotiating jointly with other tenants.

2.4 If appropriate, negotiate better terms in your lease as part of your rent review.

(See Renting premises.)