Commercial Landlord looking to increase rent and back date 4 years. Any advice

[unwashed potato!]

Our agreement has in place rent reviews every x years, with break out clause if we wanted at the same time. The landlord missed both the last 2, however now has a bee in his bonnet and wants to increase the rent twice, by almost 100%, and back date it.

now that's fine it's his decision, however we'd not have agreed to either of the rent increases, especially as it would have been during covid, and the landlord has installed other tenants in the building that are so noisey that it's impossible to use the site as an office now, so we just use it for storage, which was fine at the lower rates, but not at these increased ones.

I guess i'm a bit nieve with this as all the 12 odd years we've been here, it's never been an issue, and the place was low price, but extremelly low quality in what it was, and low fuss due to the landlord being much more casual over that time e.g. the last rent review, the landlord come to us, sat down and just said, I want to increase the rent by 20%, starting in 2 months done.

now he's got another company invovled and it's a different story.

I wondered if anyone has any experience with a situation like this? For us to leave is no issue, we can find a storage location for cheaper than what we currently pay, it's just that they are trying to back date, and say as the dates have passed, we can't leave, but he can increase to whatever he felt is correct for those dates.

 

[Freakbro]

Just depends on what your lease says. Looks like it can be a clause in a commercial lease.

Rent reviews and backdated rents​

Whilst most commercial leases expressly state rent review dates, these are often a starting point from the reviewed rent can commence. Most leases are prepared on the basis that allow the parties to commence the rent review in an agreed period to the review date and state that if they have not agreed the reviewed rent by the set review date, the same rent will continue to be payable. The leases generally then state that review can then be undertaken at any point in the future and, once the review has taken place, the landlord will be entitled to backdate the increased rent to the review date and charge interest.

For example, a lease could have an annual rent of £12,000 and state that the rent review date was to be 1 January 2015. The 1 January 2015 could come and go and the rent review may not be implemented at that point, which would mean the rent of £15,000 would continue to be payable. The landlord then may decide on 1 July 2018 that they would like to implement the rent review that should have taken place in 2015 and the review resulted in an increase of rent to £15,000. The landlord would then be entitled to recover the difference of the rent backdated to 1 January 2015 (which would equate to £250 per month and would be for a total of 42 months, giving a rental arrears of £10,500 plus interest). Such a demand could be catastrophic for a tenant. Therefore, from a tenant’s perspective, it is essential that the lease includes an ability for the tenant, as well as the landlord, to also ask for the rent to be reviewed. It may seem counterintuitive for a tenant to want the rent to be reviewed, but by doing so it can ensure that the landlord doesn’t hold off on implementing the review and then seek to make a huge backdated rent claim.

Commercial rent review clauses - Understanding your lease

Understand the different types of commercial rent review clauses, how they work, and why they are important when agreeing a lease.

harperjames.co.uk

 

[Diddums]

IANAL but I'd be fighting this tooth and nail, sounds like he's trying it on. Commercial landlords are all ******** themselves atm as their properties are all 20% down on occupancy, I suspect we'll see a lot more of this.

 

[unwashed potato!]

Just depends on what your lease says. Looks like it can be a clause in a commercial lease.

yeah i've seen the clause and don't disput they can back date, the issue is more than i'd just have left if they had increased, and i'd leave now going forward, but as the break options which were at the same time as the rent reviews, they weren't done, they say we can't now break until 2025 start.

that's what seems wrong to me.

 

[Jono8]

Just depends on what your lease says. Looks like it can be a clause in a commercial lease.

Commercial rent review clauses - Understanding your lease

Understand the different types of commercial rent review clauses, how they work, and why they are important when agreeing a lease.

harperjames.co.uk

That seems like an absolutely absurd law.

 

[dlockers]

Just depends on what your lease says. Looks like it can be a clause in a commercial lease.

Commercial rent review clauses - Understanding your lease

Understand the different types of commercial rent review clauses, how they work, and why they are important when agreeing a lease.

harperjames.co.uk

What the actual boomer-effin-hell have the previous generation indentured us with?

 

[Freakbro]

yeah i've seen the clause and don't disput they can back date,

IANAL but unfortunately if you've signed the lease with those terms...

that's what seems wrong to me.

I think we're all in agreement with you there

 

[Freakbro]

You've gotta love the bit where the landlord can charge interest on the overdue amount!

 

[Haggisman]

So in theory a landlord could rent you somewhere for £1/month under those terms, skip the first review, then a year later decide to increase the rent to £1,000,000/month and backdate it, and you would be contractually obliged to pay the £12mil?

Edit: plus interest

 

[LostCorpse]

sounds like proper legal help might be needed after checking the contract for whats entitled.
but yes a lot of comercial properies are struggling and looking to lock tenents in for 15year contracts if they can.

 

[bigmike20vt]

that is outrageous. put the rent up now, but backdating it is just plain wrong. how can this be legal?

 

[[FnG]magnolia]

Those terms seem entirely unreasonable. You can write whatever you like in a contract, it doesn't make it enforceable. I'd be engaging a very expensive lawyer to make this go away.

 

[robfosters]

Blimey, that’s absurd. It’s his fault he missed the rent reviews, he should just suck it up the greedy bar steward

 

[Chuk_Chuk]

Just depends on what your lease says. Looks like it can be a clause in a commercial lease.

Commercial rent review clauses - Understanding your lease

Understand the different types of commercial rent review clauses, how they work, and why they are important when agreeing a lease.

harperjames.co.uk

After seeing the insanity of this, I would recommend you go to a Lawyer. Take all your correspondent regarding rent review if there was any for the 2 that were missed.

If you are lucky, they may find a legal way for you to squeeze out of this arrangement.

 

[Azza]

Those terms seem entirely unreasonable. You can write whatever you like in a contract, it doesn't make it enforceable. I'd be engaging a very expensive lawyer to make this go away.

Let's all congratulate @unwashed potato! for getting Mags to make a sensible post.


Unless of course he just forgot to sign back into his multi.

 

[GreatAuk]

No experience of this but sounds like lawyer time to me... what a bonkers contract clause!

 

[unwashed potato!]

After seeing the insanity of this, I would recommend you go to a Lawyer. Take all your correspondent regarding rent review if there was any for the 2 that were missed.

If you are lucky, they may find a legal way for you to squeeze out of this arrangement.

My concern is that a lawyer will charge like £3k just to fight it.

 

[Sui]

It is crackers, I guess it’s ‘allowed’ because as a tenant you can ask them for the review. Who would ask though, as that just gives an excuse for them to increase the price!

 

[dlockers]

It is crackers, I guess it’s ‘allowed’ because as a tenant you can ask them for the review. Who would ask though, as that just gives an excuse for them to increase the price!

The thing is, in all fairness, "proper" businesses would be factoring in the increase and chasing the reviews to mitigate the risk.

 

[EvilRob]

Maybe see if you can have a sensible conversation with the landlord directly? Otherwise, agree, need legal advice.