This all started about a year ago…

We were involved in our first rent review .  We got a demand letter from our landlord for an increase in rent, from $14,250 a year to £18,000.  a year.  We were on a three year cycle of rent review,  now typical for many commercial tenants in the UK.    A five year cycle was the most common until recently.   I thought it would be a fairly easy process of coming up with a balanced rent determination….open and clear and easy to understand. 

We soon found out that this was not the case.  Commercial rent determination is a complicated and hidden process in the UK.   Our solicitor told us that we would be wise to hire a chartered surveyor to represent us.   Surveyors link amongst each other to find out the rents in the area and then the landlord’s surveyor communicates with the tenants surveyor (us) and an agreed negotiated amount is determined.

Chartered surveyors are paid on a percentage of the agreed revised rent.  We knew a very kind surveyor from out of the area who offerred to do the negotiation if I made the case for what we wanted — either no increase in rent or a small increase in rent.   He told us he would only charge us on his hourly rate.

I set out to do what I thought would be a relatively simple process.

I soon found out that was not the case.

Chartered surveyors, all members of the Royal Institution of Chartered Surveyors, RICS,  speak their own language.  Commercial properties are divided in terms of A1, A” and A3 zones — I still do not know what they are.  They have to do with the rentable value as a percentage of the prime retail space. 

Assessing these zones and agreeing same are the first jobs that the chartered surveyors need to do.  After they decide they do not have a conflict of  interest in the area in representation.  For example, a surveyor representing the landlord of a neighboring property should not accept work on behalf of a tenant next door as he/she has a conflict of interest.

Published in: on April 8, 2009 at 1:41 pm  Leave a Comment  

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