We advise on matters of rent review, lease renewal and valuation elements of dilapidations claims.
Rent reviews on behalf of existing and new clients who may hold single properties or property portfolios. Much of our work is referred by existing clients or professionals, including accountants and solicitors but instructions from all sources are welcome. We have investor clients and a tenant client base and conduct rent reviews throughout the North East of England and further afield.
Rent review settlements are usually based on market rental value. Having established market rental value, representations are made on behalf of the client with a view to reaching a negotiated settlement. The majority or rent reviews are settled by negotiation but in the absence of a negotiated settlement the matter is determined by a third party such as an Arbitrator or Independent Expert. When required, representations on behalf of our client are made to the Arbitrator or Independent Expert.
Commercial and industrial properties are usually subject to occupational leases. When the lease is reaching the end of its term, a lease renewal process can commence. This can be instigated either by the Landlord or the Tenant. The lease renewal process involves negotiation of new lease terms by Landlord and Tenant. We can assist the client in negotiating new lease terms and liaise with the clients solicitors during the legal process of completing the new tenancy. The majority of lease renewals are settled by negotiation but where agreement between Landlord and Tenant cannot be reached, the matter can be referred to mediation at the County Court for determination where we represent our client in presenting proposed lease or terms, supported with market rental evidence.
It is generally the case that settlements are reached by negotiation rather than referral to third party's such as Independent Experts/Arbitrators (in respect of rent reviews) or mediation or the County Court (in respect of lease renewals). Negotiated settlements often result in reduced costs for the client. However, if it is not possible to reach a negotiated settlement, we will support the client through the third party determination process.
Lease terms will often be specific about the repairing obligations of the Landlord and the Tenant. The lease will contain covenants which set out these obligations for the Landlord and the Tenant.
Where there are breaches of repairing obligations, a schedule of dilapidations is often served by the Landlord on the Tenant. These schedules detail alleged breaches of the lease terms and the remedy sought by the Landlord. The schedule and the costing of wants of repair, painting and decoration will be prepared by a building surveyor or quantity surveyor. However a Landlord is entitled to the lower of the cost of the repairs or, the diminution in value caused by any failure by the tenant to repair the property, in accordance with the terms of the lease. Ashley Smith advise on matters of diminution in value. This is then compared to the costs of carrying out the repairs. Establishing diminution in value (under Section 18(i) of the Landlord & Tenant Act 1927) is therefore an important part of any dilapidations claim.