What is interim rent?

The rent payable between the expiry of the contractual term and the grant of a new tenancy under the 1954 Act, fixed by the court or by agreement under Sections 24A to 24D.

Who can apply for interim rent?

Either the landlord or the tenant, but only one application is made in each renewal, and it must be made no later than six months after the tenancy ends.

Is interim rent the same as the new lease rent?

Often, where Section 24C applies. Under Section 24D it is valued on a year-to-year basis of the holding, which typically produces a lower rent than the new lease.

Should a tenant apply for interim rent?

In a falling market, usually yes, because it captures the reduction for the whole holdover period. In a rising market it is generally the landlord's application to make.

Interim Rent: How It Is Calculated Under the 1954 Act

Q: Can interim rent be backdated?

Yes — it runs from the earliest date that could have been specified in the Section 25 notice or Section 26 request, which may be well before the application.

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When interim rent starts

Interim rent runs from the earliest date that could have been specified in the Section 25 notice or Section 26 request — not from the date of the application. That makes the timing of notices a valuation decision as much as a procedural one.

The two valuation routes

Where the tenant occupies the whole and the renewal is unopposed and the new tenancy is actually granted, Section 24C presumes the interim rent equals the new lease rent, subject to adjustment where the market or the terms have changed materially. Otherwise Section 24D applies, valuing a hypothetical year-to-year tenancy of the holding — a basis that usually produces a lower figure than an open market rent on the full lease terms.

Why it matters

Renewals routinely run twelve to twenty-four months beyond the term date. On a falling rent, an interim rent application converts that entire period into a saving; on a rising rent, delay is a benefit the landlord will try to remove. Either way the application is cheap, and only one party can make it in each renewal.

Common questions

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Chris McGarrigle MRICS, chartered since 1989, acting for occupiers across England, Scotland, Northern Ireland and Ireland.

chris@mcgarrigle.com

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