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Valuations
Rent Reviews,
| Question | Answer |
|---|---|
| What is a rent review | Rent reviews are a provision in a lease where by the rent can be adjusted on a premises to the current market level at stated intervals |
| What is a time frame of a rent review | 3 to 5 years |
| how did rent reviews change in 2009 | In December 2009, the Land and Conveyancing Law Reform Act banned upwards only rent reviews in new leases commencing after 28th February 2010. |
| How to activate a rent review | The process is usually by the landlord, but can be the tenant where market has declined. If no party initiates a rent review within allowed timeframe, rent remains the same. The individual calling for the RR will state a new rental figure. |
| What if one party disagrees with the new figure | they must write and say they disagree immediately. They should also ask for clarification on how this figure was arrived at and a copy of the comparable evidence used. |
| what happens if both parties cannot come to an RR agreement after trying to dispute. | Get a Chartered Surveyor specialising in valuation to determine the new rent. If the parties are unable to agree themselves the third party, the lease usually provides for the appointment to be made by the SCSI. |
| What is arbitration | It is the process where an independent party looks at a dispute and settles it. Both parties in the dispute agree for the dispute to go into arbitration (usually by having agreed to the dispute process set out by the lease agreement). |
| What happens if there is a delay when agreeing the rent and the tenant hasn't paid in the during this | If there is a delay in agreeing the rent the tenant will be liable for the back-dated rent, plus interest at a “base rate” provided for in the lease. |
| what's the difference between an arbitrator & a expert | An arbitrator must base decisions on evidence, such as comparable rents. but An independent expert may base their decisions on evidence and their own knowledge of the market. |
| The basis on which the new rent will be determined will be on the basis of certain assumptions : | that the premises will be let as a whole that the tenant has fulfilled all his repairing and decorating obligations as provided in the lease, and has fulfilled all covenants in the lease |
| The basis on which the new rent will be determined will be on the basis of certain disregards : | In summary, the lease to be valued at rent review time is a hypothetical lease identical to the existing lease so that the rent will be calculated on the same basis as the existing lease. |
| Role of the valuer in rent reviews | To provide opinion of market value. To negotiate on clients behalf. To be an expert witness (provide third party valuation and answer questions on same) Advocate. |
Created by:
jadaoreilly
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