Rent review: the clause that resets what you pay

A rent review is the point in a lease where the rent is recalculated, usually every three to five years. For a tenant it is the largest single cost change in the life of the lease, and it arrives on a date fixed years earlier — which means the preparation window is known well in advance and is almost always used badly or not at all.

How a rent review is usually calculated

• Open market: rent is reset to what the property would command on the review date, judged by comparable lettings.
• Index-linked: rent moves with an inflation measure, which is predictable and can exceed market movement substantially.
• Stepped or fixed uplifts: agreed increases written into the lease at the outset, with no negotiation at the time.
• Turnover-based: a share of trade, common in retail and usually combined with a base rent.
• Upward-only: the clause meaning rent cannot fall even if the market has, which is standard in some jurisdictions and highly significant.

Why upward-only matters more than the mechanism

An upward-only open market review is not a review in any ordinary sense — it is an opportunity for the rent to rise and no risk of it falling. In a flat or declining market the outcome is simply that nothing changes, while in a rising one the tenant absorbs the whole movement. That asymmetry is worth understanding at the point of signing rather than at the point of review, because by then the clause is fixed and the only variable is the evidence about market value.

The review date and the deadline for serving or responding to a notice are different dates, and in some leases a missed response has consequences — in older drafting, a failure to respond in time could deem the landlord's figure agreed. Check whether time is of the essence in your clause before assuming a deadline is soft.

What to prepare before the date

1. Diarise it from signature, together with any notice deadlines derived from it.
2. Gather comparable evidence early: what similar space nearby has actually let for, including incentives like rent-free periods.
3. Work out the effective rent of those comparables rather than the headline, since incentives distort the figure substantially.
4. Document the property's shortcomings — size, condition, access, anything that makes it worth less than the comparable.
5. Take advice on anything material, since a surveyor usually recovers their fee on the first review.
6. Decide your walk-away position in advance, particularly where a break clause falls nearby.

Ettex Records keeps the lease with the review dates, notice deadlines and the comparable evidence gathered for each cycle, which matters because the next review will ask the same questions and the previous answers are the cheapest starting point. The break clause and the review often sit close together, and deciding them in isolation is how tenants end up committed at a rent they intended to escape.