Network Rail rent increase.
Discussion
Hi need some advise please.
I rent a arch from Network Rail in Bermondsey SE16, and have been there nearly 3 years. The rent was fixed for 3 years at £17,900 per year with a rent review in 3 years. They have sent me a letter saying they want to increase the rent from June 2016 to £38,650 per year.
After querying this I was told that I had to Counter notice the price review as if I did not do that the rent would automatically increase to £38,650.
Are they allowed to increase the rent by nearly £20k per year ? Are they any laws that protect me ? I fully understand that rent goes up and I am prepared to pay something but I can't afford that increase otherwise it will mean closing the doors for good.
I spent £25k making the arch fit for our use with phone lines computers and now they try this.
Any advice would be very much appreciated
Thanks in advance
Nat
I rent a arch from Network Rail in Bermondsey SE16, and have been there nearly 3 years. The rent was fixed for 3 years at £17,900 per year with a rent review in 3 years. They have sent me a letter saying they want to increase the rent from June 2016 to £38,650 per year.
After querying this I was told that I had to Counter notice the price review as if I did not do that the rent would automatically increase to £38,650.
Are they allowed to increase the rent by nearly £20k per year ? Are they any laws that protect me ? I fully understand that rent goes up and I am prepared to pay something but I can't afford that increase otherwise it will mean closing the doors for good.
I spent £25k making the arch fit for our use with phone lines computers and now they try this.
Any advice would be very much appreciated
Thanks in advance
Nat
Edited by Nattyboy62 on Thursday 3rd December 20:34
Edited by Nattyboy62 on Thursday 3rd December 20:34
Edited by Nattyboy62 on Thursday 3rd December 20:35
Please ignore Nickyboy. He knows nowt and should not have bothered to comment.
Dave87 is half right. L&T is a specialist subject - but you need a L&T Surveyor not a lawyer. In the unlikely event that there is anything really contentious they will shout if needs legal advice.
First of all read your lease. This will have specific clauses which are relevant, and while I can give a general guide, that's all it is without reading the lease.
Secondly the figures you mention are reasonably chunky. To my mind chunky enough to get representation from a local Chartered Survey with experience in Landlord & Tenant (as Rent Review surveyors are called.)
In general terms.
The lease will likely say along the lines of that the rent will be reviewed to Market Rent, subject to specific assumptions and disregards. Therefore your argument is what the market rent is.
I note you've spent quite a lot. Typically rent review clauses will disregard value attributed to authorised tenants improvements. If it was a leaky dungeon before, that's what your valuing. Hopefully. Lot's of catches here.
Serving a counter notice generally is nothing more complicated then sending a letter saying that you do not agree with their proposed increase. Ask them for comparables to support it whilst at it. READ YOUR LEASE - It may require a specific form of letter.
DEADLINES
Beware of TIME OF THE ESSENCE or the word DEEMED. These are important if they are in there, and failure to follow the procedure is likely to cause you to be on the hook. (I have a fantastic example of a national firm who cocked this up after winding me up. It cost them a pretty penny).
Dispute
If you can't agree the review then the lease will contain a procedure to go to either Arbitration or Independent Expert. I would not suggest doing this without expert assistance.
Evidence
Network Rail or not above cherry picking the deals that show the best increases. This is why you need someone local active in the market who knows the deals at the other end of the market....
Hope that helps.
A bit broad brush, but a general flavour at least.
Dave87 is half right. L&T is a specialist subject - but you need a L&T Surveyor not a lawyer. In the unlikely event that there is anything really contentious they will shout if needs legal advice.
First of all read your lease. This will have specific clauses which are relevant, and while I can give a general guide, that's all it is without reading the lease.
Secondly the figures you mention are reasonably chunky. To my mind chunky enough to get representation from a local Chartered Survey with experience in Landlord & Tenant (as Rent Review surveyors are called.)
In general terms.
The lease will likely say along the lines of that the rent will be reviewed to Market Rent, subject to specific assumptions and disregards. Therefore your argument is what the market rent is.
I note you've spent quite a lot. Typically rent review clauses will disregard value attributed to authorised tenants improvements. If it was a leaky dungeon before, that's what your valuing. Hopefully. Lot's of catches here.
Serving a counter notice generally is nothing more complicated then sending a letter saying that you do not agree with their proposed increase. Ask them for comparables to support it whilst at it. READ YOUR LEASE - It may require a specific form of letter.
DEADLINES
Beware of TIME OF THE ESSENCE or the word DEEMED. These are important if they are in there, and failure to follow the procedure is likely to cause you to be on the hook. (I have a fantastic example of a national firm who cocked this up after winding me up. It cost them a pretty penny).
Dispute
If you can't agree the review then the lease will contain a procedure to go to either Arbitration or Independent Expert. I would not suggest doing this without expert assistance.
Evidence
Network Rail or not above cherry picking the deals that show the best increases. This is why you need someone local active in the market who knows the deals at the other end of the market....
Hope that helps.
A bit broad brush, but a general flavour at least.
surveyor said:
Dave87 is half right. L&T is a specialist subject - but you need a L&T Surveyor not a lawyer. In the unlikely event that there is anything really contentious they will shout if needs legal advice.
I'm going for both right 
The service of notices point was the bit I was dealing with - get that wrong and it can cost! However you are entirely correct in that the actual valuation of the property would be done by a surveyor, and in many (non-contentious) cases, they can deal with it entirely.
My feeling was given the disparity in rental expectations, it might be the precurser to a dispute.
dave87 said:
surveyor said:
Dave87 is half right. L&T is a specialist subject - but you need a L&T Surveyor not a lawyer. In the unlikely event that there is anything really contentious they will shout if needs legal advice.
I'm going for both right The service of notices point was the bit I was dealing with - get that wrong and it can cost! However you are entirely correct in that the actual valuation of the property would be done by a surveyor, and in many (non-contentious) cases, they can deal with it entirely.
My feeling was given the disparity in rental expectations, it might be the precurser to a dispute.
Edited by surveyor on Friday 4th December 00:33
Been trying to think who would be a good surveyor in that area but am struggling, as it is getting near to Central London. Values in that area are likely to have increased for a couple of reasons, its an up and coming area, its close to central London and possibly most importantly lots of industrial/warehouse space has been redeveloped in to housing reducing supply.
I would suggest that the OP needs to speak to his neighbours and gets details of their rents and when their review is due. Many businesses dont like sharing rental information I dont know why, as in my experience where tenants think they have a special deal its usually special for the landlord not the tenant!
Any surveyor is likely to want to work on an incentive basis, ie a percentage of the saving between the quoted rent and the rent agreed. You might want to find out how realistic the quoted rent is first so you can get an idea on how to pay the surveyor. Personally I would try and be a bit more creative with the fee and give increases in the fee for hitting particular targets to make it worth the agent working hard on your behalf.
I would suggest that the OP needs to speak to his neighbours and gets details of their rents and when their review is due. Many businesses dont like sharing rental information I dont know why, as in my experience where tenants think they have a special deal its usually special for the landlord not the tenant!
Any surveyor is likely to want to work on an incentive basis, ie a percentage of the saving between the quoted rent and the rent agreed. You might want to find out how realistic the quoted rent is first so you can get an idea on how to pay the surveyor. Personally I would try and be a bit more creative with the fee and give increases in the fee for hitting particular targets to make it worth the agent working hard on your behalf.
One point that hasn't been made is that the lease will be 'outside the act ' , you don't have the right to remain in occupation.
There will be a paragraph at the end of the lease mentioning sections 24-28 of the landlord and tenant act.
So yes they can ask what they want but you can move out. As has rightly been suggested you need advice , part of the reason for the hike might be they're well aware youre tied to the property now having spent the £25k.
Kalmars are a local agent In SE1 but Glennys are a larger firm and one I would recommend.
If you're worried about paying a surveyor £1,500 then you're looking at this backward, they will get you the market deal (the best you'll get). With NR they won't be able to make any changes to the terms as these are pretty fixed but at least you'll be confident you're paying the right amount.
For what it's worth most arches are let to people without representation so big uplifts do happen, don't just accept it because your neighbour got legged over!
Hope it resolves itself to your satisfaction.
There will be a paragraph at the end of the lease mentioning sections 24-28 of the landlord and tenant act.
So yes they can ask what they want but you can move out. As has rightly been suggested you need advice , part of the reason for the hike might be they're well aware youre tied to the property now having spent the £25k.
Kalmars are a local agent In SE1 but Glennys are a larger firm and one I would recommend.
If you're worried about paying a surveyor £1,500 then you're looking at this backward, they will get you the market deal (the best you'll get). With NR they won't be able to make any changes to the terms as these are pretty fixed but at least you'll be confident you're paying the right amount.
For what it's worth most arches are let to people without representation so big uplifts do happen, don't just accept it because your neighbour got legged over!
Hope it resolves itself to your satisfaction.
Noel said:
For what it's worth most arches are let to people without representation so big uplifts do happen, don't just accept it because your neighbour got legged over!
Unfortunately, your neighbours getting screwed over is exactly what results in your being screwed over. Which is going to happen if they don't get representation.They create the comparable evidence to which is then referred to.
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