The Government surprised the property industry yesterday by proposing a partial ban on upward only rent review clauses in commercial property leases in England and Wales.
Traditionally commercial property leases provide for the rent to be reviewed every 5 years on an “upwards only” basis. This means that the rent following a review will never be less than the amount it was before the review.
Contained in the English Devolution And Community Empowerment Bill however is a proposed amendment to the Landlord And Tenant Act 1954 to effectively outlaw such upwards only reviews. We’ll need to wait and see how the Bill is amended as it progresses through Parliament but, as it stands, the ban effectively outlaws upwards only reviews for most business tenancies.
The ban isn’t retrospective so will only apply to leases granted after the Bill comes into effect. It could however catch leases that are renewed under the 1954 Act.
The devil really will be in the detail and we’ll watch the Bill’s progress with interest.
If you’d like to discuss further how this may affect you and your business do contact your usual property contact here at Winckworth Sherwood.