If you have a formal lease in place on your business premises, there will, without doubt, be a clause that contemplates an increase in rentals, called a rent review. The lease will stipulate, how and when the rent can be reviewed, and the protocols regarding the service of rent reviews notices which may include a time of the essence clause.
Generally, or at least up to recently, rent reviews will be upward only, i.e. the rent will not go down below the passing rent, albeit in Eire it is now mandatory that rent reviews are upward and downwards, which is generally an equitable arrangement.
In the UK has been frowned upon and many leases don't allow for this but this does not mean that they can not be included in a new lease, I recently did a rent review on behalf of a high street retailer reducing an over-inflated rent down from £130,000 p.a to £34,000.p.a, it is my view these rent reviews will be more prevalent and insisted upon by tenants, much to the dismay of many landlords who have enjoyed a privileged position on rent.
If the rent can not be agreed by negotiation it will be referred to a third party for determination, either to an arbitrator or an independent expert.
If the lease stipulates that it should be determined by Arbitration, each party will be invited to submit evidnce to an appointed arbitrator, which takes the form of evidence of the market, terms of the lease and comparable evidence that is available. The process is governed by the Arbitration Act 1996, which is specific on how the arbitrator should conduct themselves, and how to invite submissions of evidence.
The award or decision of the arbitrator is based on the weight of evidence of the submissions and counter submissions, which will also include experience qualification and relevance of the reports. It is thereor crucila that a landlord or Tenant prepares their report by a suitably qualified person, an expert in thier field.
I have prepared many submission of evidence over the years and as such am suitably qualified in the retail market, professional, academically and by experience.
