Commercial Property Rent Reviews (Part 9)
Treatment of onerous lease terms
If the parties have agreed anything unusually restrictive, burdensome or personal in the Lease, they should always check how those provisions will be dealt with on rent review.
As a general point, if a Tenant has been obliged to agree an onerous obligation or restriction in the actual Lease (for example a restrictive user clause, which may not only restrict the Tenant’s use, but also restrict the Tenant’s ability to underlet and/or assign the Lease), the Tenant should resist any attempt by the Landlord to disregard it on rent review. Otherwise, the Tenant has an onerous obligation that is not taken into account at rent review and, therefore, no reduction in the rent to reflect it.
What is “onerous” will depend on the market at the time.
(This article is not intended to be comprehensive or to provide specific legal advice. It should not be relied upon in the absence of specific advice given in relation to particular circumstances.)
For further information, please contact: Natalie Linehan, Andrew Williamson or David Thorp