In relation to commercial rent review, what is the surveyor’s report and what can it do for you? The landlord and tenant’s surveyor will debate the revised rent and when both agree, a rent memorandum will be issued.
To help the surveyor with the report, relevant documentation, as well as a visit to the premises, will be needed. The surveyor will then make an assessment and create a comprehensive report. In relation to rent review, a surveyor will give independent advice to both tenants and landlords. Surveyors with commercial property experience will be the most qualified for the job because they understand the nature of the business.
Rent reviews are normally upward which makes the business more viable for the landlord. But if you’re a tenant, you could be entitled to a rent reduction. In any case, a commercial surveyor will at least do their best to maintain the rent price, which generally benefits both landlord and tenant. In order to do this, surveyors need the right documentation with records of the property up keep and the lease agreement.
When the surveyor views the property, one part of the final report will be ‘comparables’. Comparables are similar properties in the area for the “going” rent. The surveyor will liaise with agents and find out what is the going rate. The surveyor might be challenged because there might be a like for like comparison. Some properties may be out of the ordinary in a particular area and so comparisons might prove difficult. Some examples would be a basement property or a quirky church conversion.
The basic measure is what is referred to as a ‘hypothetical lease’ or a lease of a similar term, ignoring the ‘tenant works’ and ‘good will’. Rent can be dated back to the old rent’s end date. If there’s a dispute, the rent rate remains unchanged. If the tenant, landlord and surveyor cannot come to an agreement, there are provisions in the agreement that may assist in resolving the matter. An independent surveyor can arbitrate and come up with an agreed figure.
Would you like us to help you with your lease agreement, rent review and a surveyor report? If you give us a call for an informal discussion, we can arrange for the rent review process to initiate. Please give us a call for a no obligation initial discussion. SG
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