The trigger notice and what it means
A rent review normally starts with a letter from the landlord or their surveyor, sometimes called a trigger notice, proposing a new rent. Landlords do not always serve this on the review date; many leases allow the review to be started years late, and the increase is then backdated with interest. The proposed figure is an opening position, and in our experience it is frequently pitched 15 to 40 per cent above what the evidence supports.
Read the review clause before you reply. Some leases make time of the essence, meaning a missed deadline can bind you to the landlord's figure. Others contain a deemed acceptance provision where silence for a set period, often 28 days or three months, is treated as agreement. Both are less common in modern institutional leases but still appear in older London shop and office leases, so check rather than assume.
How the new rent is worked out
Almost every London review is to open market rent, upwards only. Upwards only means the rent can rise or stay the same but never fall, even if the market has dropped. The new rent is what a hypothetical willing tenant would pay for the premises on the terms of a hypothetical lease set out in the clause, ignoring certain things and assuming others.
The assumptions and disregards matter more than most people expect. Your own fit out and improvements are usually disregarded, so you should not pay rent on value you created. The premises are typically assumed to be fitted out and ready to trade, and any rent free period a new tenant would negotiate may or may not be stripped out depending on the wording. A clause that assumes a ten year term with no breaks can support a different rent from one mirroring your actual lease.
- Comparable lettings and reviews of similar units nearby, ideally within the last 12 to 18 months
- Adjustments for size, frontage, floor level, condition and lease terms
- The assumed term and the review pattern in the hypothetical lease
- Whether headline or net effective rents are being used as evidence
Negotiation and where the evidence comes from
Once both sides have exchanged positions, the review becomes a negotiation between surveyors. Evidence is gathered from agents, the Land Registry, lease databases and direct enquiry with neighbouring occupiers. In central London, an office review might turn on a handful of lettings in the same building or street; in a suburban parade in Croydon or Ealing, the evidence base is thinner and the argument often centres on how to adjust it.
Most reviews settle at this stage. A common outcome is a rent somewhere between the two opening figures, recorded in a signed rent review memorandum. Whether the final rent lands closer to your figure or the landlord's depends on the quality of the evidence, how the clause is drafted, and how well each side argues the adjustments. Fees for advice at this stage typically run from a few hundred pounds for a review of the clause and evidence to several thousand for a full negotiated review on a larger unit.
If you cannot agree: third party determination
Where negotiation stalls, either party can apply for an independent surveyor to decide the rent. The lease will say whether that person acts as an arbitrator or an independent expert, and the difference is real. An arbitrator decides only on the evidence and arguments put before them and follows a formal procedure. An independent expert can use their own knowledge and investigations and is not bound by what the parties submit.
Applications are usually made through the RICS Dispute Resolution Service, with the appointment fee currently in the region of a few hundred pounds and the third party's own fees on top, often between £3,000 and £15,000 depending on complexity. Costs are normally shared or awarded against the losing party in arbitration. Because of the expense, a credible threat of referral often prompts settlement, but you should only go that route with strong evidence and a clause that supports your reading.
What to do when the letter arrives
Do not respond with a counter figure straight away, and do not ignore it. Check the review date, the mechanism, any deadlines and whether interest applies to backdated rent. Gather your own evidence early, because landlords with large London portfolios hold comparable data you will not see unless you ask for it or find it independently.
Keep paying the passing rent until the new figure is agreed or determined. The difference, plus interest at the rate stated in the lease, becomes payable once the review concludes. Budget for that from the outset rather than being caught by a lump sum demand eighteen months later.
Common questions
Can my rent go down at a commercial rent review?
Only if the lease allows it. The vast majority of UK commercial leases have upwards only reviews, so the rent can rise or stay flat but cannot fall. A genuine upward or downward review is rare and is usually negotiated at the outset of the lease.
What if the landlord missed the rent review date?
In most leases time is not of the essence, so the landlord can still start the review late and backdate any increase, often with interest. Check the clause, because a minority of leases do make time of the essence or include deadlines that bind either party.
Do I need a surveyor for a rent review?
Not legally, but the landlord will almost certainly use one. A chartered surveyor with local evidence and experience of review clauses can often reduce the proposed figure by more than their fee, particularly on London premises where the sums involved over a five year period are significant.