Rent review - Commercial (warehouse) Property

[V8 EOL - Rich]

The ideal way would be to lock them in to their performance, say 1/3rd of the savings?

...but then pigs don't fly after all...

[Davel]

Presumably you mean one third of the annual rental saving rather than one third over the full period.

[Chrisgr31]

You don't need a solicitor for a rent review however do probably need a Chartered Surveyor.

Can you clarify whether the savings of £10,000 to £15,000 are over the period until the next review or per annum?

My fee basis would be on a straight percentage of the difference between the rent quoted per annum and rent agreed per annum. So if I agreed a fee basis of 1/2th saving and Landlord quoted £15,000pa and I agreed £10,000 pa my fee would be £2,500. Before you ask I don't cover your area though! I would be reluctant to pay an initial fee and would only do so if it was deducted from the final saving fee.

What you might like to check is whether your Chartered Surveyor acts for any landlords in the area. Many Chartered Surveyors seem to find it ok to act for a tenant one day, and the landlord of the adjacent property on the next! Not many only act for tenants.

[The Londoner]

As Chris says, the retainer should be deducted against the final fee. Bit cheeky to want both imho. Also make sure that fee includes for work on any referral to arbitration if agreement can't be reached.

[Davel]

Do you have an 'option to break' at the same time?

If so, you could always start looking elsewhere and threaten notice to quit.

How often are the rent reviews 3, 5 years and what term is left on the lease?

[Noel]

Find out who represents other tenants in the area, Landlord & Tenant surveyors often act for either landlords or tenants. You'd do well to find the firm who have focussed their business on representing tenants. They might also be able to help with renewals/relocations in the future.

See RICS web site below, alternatively google searches should reveal your main local players.

http://www.ricsfirms.com/vw/search/location.aspx

Haven't done a review since I qualified so can't comment on fee level, however i would expect the base fee to be deducted from the incentivised total.

[530dTPhil]

First thing is to find out what similar properties have accepted as their square foot cost at recent reviews. This will establish if the rental that the landlord is seeking is unreasonable.
We have used Natress Giles in Birmingham to handle rental reviews for us in the Midlands. They work on a proportion of the saving as has already been mentioned on here. Our normal contact that comes highly recommended is Paul Matthews. Don't have the number handy, sorry.

[Chrisgr31]

The fee sounds about right to me assumming the £950 is being deducted from the 30% saving. You don;t really want to screw them too much on the fee as you want the work put in to get a reduction. Incidentially when we aork on a savings basis we specifically exclude any work that is required for any determination by a third party. Preparing a third party submission is a lot of work and a total pain in the arse!

The Landlord has no obligation to get any estimates of rental value when he quotes terms to you, the tenant. It is up to you to object to or accept his proposal. Many tenants will base the rental increase on either how much they get the Landlord to reduce his increase by, or on how much they can afford to pay. This is invariably wrong.

Most rent reviews are to an open market rent. So will be whatever is being paid by other new occupiers, although most rent review clauses seek to ignore incentives such as rent frees etc. Other things that will affect the rent is the notional term, the longer the term the less the rent per sq ft.

However if you are happy with the firm you have chosen, and there are not lots of their boards seeking to let properties in the area then I would accept a fee basis of 30% of the saving without the £950 top -up.

If there are lots of their boards in the area consider where most of their income comes from!