If you are a tenant or a landlord of a commercial property, you may encounter a rent review dispute at some point. A rent review dispute is when the parties disagree on the amount of rent that should be paid for the property after a rent review clause in the commercial lease legal fees is triggered.
A rent review clause is a provision that allows the landlord to adjust the rent periodically, usually every three or five years, to reflect the current market value of the property.
There are different ways to resolve a rent review dispute, depending on the terms of the lease recommended by the professional commercial lease solicitor and the preferences of the parties.
Common Methods To Resolve Rent Disputes
- Negotiation: The simplest and most cost-effective way to resolve a rent review dispute is to negotiate directly with the other party and try to reach a mutually acceptable agreement. This can be done informally or with the help of a professional mediator, and can save time and money, and preserve the relationship between the parties.
- Arbitration: If the parties cannot agree through negotiation, they may choose to refer the dispute to an arbitrator, who is an independent and impartial expert appointed by the parties or by a professional body. The arbitrator will examine the evidence and arguments of both sides privately and confidentially and make a binding decision on the rent, but it can be expensive and time-consuming, and the parties have limited rights to appeal the arbitrator’s decision.
- Expert Determination: The expert will act as a valuer, not as a judge, and will use their professional knowledge and experience to assess the market value of the property. His decision is final and binding, unless there is a manifest error. Expert determination is usually faster and cheaper than arbitration, but it may not be suitable for complex or contentious disputes, as the parties have no control over the procedure or the outcome.
- Court: The last resort is to take the dispute to court, which can be done if the lease allows it or if the parties agree to it. The court will hear the evidence and arguments of both sides and make a judgment on the rent. These proceedings are public and formal, and the parties have the right to appeal the court’s decision. However, it can be very costly, lengthy, and stressful, and it may damage the relationship between the parties.
The best way to avoid or minimize rent review disputes is to have a clear and fair rent review clause in the commercial lease legal fees, and to seek professional commercial lease solicitor advice before entering into or renewing a lease. If a dispute arises, it is advisable to try to resolve it amicably and quickly, using the most appropriate method for the situation.