Rent Reviews and Rating Assessments

3. Using a Third Party

If you cannot agree the new rent with your landlord, the lease usually specifies that a third party should resolve the disagreement.

It sets out the procedure, including whether the third party should act as an arbitrator or an independent expert (see 3.2 and 3.3).

3.1 First try to agree on an independent third party, such as a local chartered surveyor specialising in rent reviews.

• You have the right to veto the landlord's suggestion, if there is reason to believe this person would favour the landlord.
• If you cannot agree the appointment, an independent appointment must usually be made by the President of the Royal Institution of Chartered Surveyors.

3.2 If the third party is to act as an arbitrator, his or her decision will be based mainly on evidence presented by you and the landlord.

• Your professional adviser can help you build and put forward a strong case.
• The arbitrator decides how the fees and costs of the parties should be apportioned.If there is a clear loser who is seen to have been unreasonable, that party could be ordered to pay the full costs.

3.3 If the third party acts as an independent expert, he or she must decide the appropriate level of rent based on his or her own knowledge and investigations.

• The independent expert need not consult you or the landlord. So the role of your professional adviser may be less important than with an arbitrator.
• Usually you split the fees equally with the landlord and pay your own costs, even if you win the appeal.

3.4 The major drawback of going to a third party is the cost, as well as the time.

• The fees are usually agreed by you and the landlord when the third party is appointed.
• Even as a small business, you can expect to pay at least £1,000, plus the cost of your own professional advisers.
• The third party's decision on the case is usually not announced until the fees have been paid.

3.5 Once the third party's decision is made, any rent owed is payable immediately.

• The new rent is backdated to the rent review date. Interest is likely to be payable.

3.6 The alternative way to settle a rent dispute (if your lease allows it) is to use a mediator. You and your landlord need to agree who the mediator will be.

• Using a mediator may be a quick and cheap solution. But the mediator has no authority to impose a rent on either party.