A more recent version of these Lease Rent Review Provisions Annotated notes – written by Cambridge And Oxilp And College Of Law students – is available here.
The following is a more accessble plain text extract of the PDF sample above, taken from our Property Law and Practice Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
Work Shop 9 SCHEDULE 2: THE RENT AND RENT REVIEW 2-1 Meaning of 'Open Market Rent'
1 . 2
For the purpose of this Lease 'Open Market Rent' means the best rent at which the Premises might be let on the open market as a whole or in parts (whichever shall produce the higher rent) on the relevant Review Date by a willing landlord to a willing tenant without any premium and with vacant possession of the whole and subject to the provisions of this Lease (excluding the provisions relating to rent but including the provisions for review of rent) as varied from time to time for a term equal to 15 years commencing on the relevant Review Date the unexpired residue of the Contractual Term at the relevant Review Date but,
2-1.1 Assumptions on the assumption that at the relevant Review Date: 2-1.1.1 the Premises are in a physical state to enable them be lawfully used by the willing tenant (or any assignee of the willing tenant) for any purpose permitted by this Lease, 2-1.1.2 no work has been carried out to the Premises by the Tenant its sub-tenants or their predecessors in title during the Term which has diminished the rental value of the Premises, 2-1.1.3 if the Premises have been destroyed or damaged they have been fully restored, and
4. 2-1.1.4 the Tenant's Covenants and the Landlord's Covenants have been fully complied with, 2-1.2 Disregards but disregarding: 2-1.2.1 any effect on rent of the fact that the Tenant or its predecessors in title have been in occupation of the Premises, 2-1.2.2 any goodwill attached to the Premises arising out of the business of the Tenant or its predecessors in title in their respective businesses, and 2-1.2.3 any effect on rent attributable to any improvement to the
1. "best rent" should be changed to "open market rent" as otherwise the value could consider the presence in the market of a special bidder willing to pay in excess to secure the property and this will skew the rent upwards, which will be adverse to T. P.284
2. If the T is ONLY allowed to assign the WHOLE of the premises and CANNOT assign PART this clause is unfair. This review fixes rent on more flexible terms, beneficial to the LL (i.e. the property will rent higher if let "in part" the LL will benefit from this on review as it will increase LL's income) which do not reflect the reality of the lease as the T is not allowed to assign part. This clause creates an artificial higher value of the rent and unfairly affects the T. T has 2 options: 1. Delete the "Part" section of the clause; or 2. Change the lease to allow assignment of part. Finally, if the lease allowed assigning of Part, then the clause would be acceptable.
3. The unexpired residue of the lease is advantageous to the LL. "15 years" should be changed to "unexpired residue of the Term of at the relevant Review Date" as this will represent the lease with greater accuracy as the term is 15 years and will be reviewed every 5 y (see Schedule __ (Rent Review) - Clause __) and therefore the minimum will always be 5 y. If it is kept at 15 y it may give an artificially long lease for the rent review which could be detrimental to the T/LL depending on whether long or short leases are desirable.
5. Premises carried out before or after the date of this Lease by or 4. LL is removing some of his at the expense of the Tenant
2-2 Rent Review At each Review Date the Rent will be reviewed in accordance with the provisions of this Schedule and from and after each Review Date the Rent will be the greater of the Rent payable (or which would be payable but for the provisions of clause 5.5 SUSPENSION OF RENT) immediately before the relevant Review Date and the Open Market Rent on the relevant Review Date 2-3 Fixing the Reviewed Rent 2-3.1 The revised rent for any review period may be agreed in writing at any time between the Landlord and the Tenant or (in the absence of agreement) determined not earlier than the
obligations contained in the lease. The LL has entered into covenants with respect to this lease which if he fails to perform will negatively impact the T. The assumption that the LL has performed his covenants increases value of rent at review which may not reflect reality. LL may counter-argue that without this clause the valuer will assess the rent at a lower level and that T's remedy is to bring proceedings against the LL in respect of the LL's breach of covenant. LL is arguing that it is unfair to set rent at a low level for a temporary breach of covenants. T's counter-counterargument is that a claim for breach of
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