Avoiding Back Rent

It can be tempting for a Tenant to allow the rent review date in the lease to come and go, in the faint hope that the Landlord has forgotten to increase the rent. Whilst it is true that on rare occasions a Landlord may be remiss, and some Tenants have the immense luck to continue paying an outdated passing rent with no increase, these cases are the exception and most certainly not the rule.

Can a Landlord serve a rent review notice after the review date?

Yes. The vast majority of leases where time is not of the essence allow the Landlord to serve a rent review notice on the Tenant at any point after the review date. This may be a month, a year or perhaps several years later, and the consequences can unfortunately be crippling to a Tenant.

Why do Landlords delay rent reviews?

Most often because the Landlord has simply not yet had time to deal with the property. There are a plethora of reasons why a Landlord may let a rent review date pass without serving notice, but the three most common are:

• the property is over-rented and no increase is justified
• the Landlord is waiting for new comparable evidence to strengthen their case
• most commonly, the Landlord has simply not yet had time to deal with the property, but rest assured, they will do so at a later date

How much back rent can a Tenant face?

Thousands of pounds that have not been budgeted for. When a retrospective notice is served, the rent must be calculated according to the value of the property at the time of the rent review (why the date matters), but this often does not prevent a substantial increase, which the Landlord then backdates to the review date. As soon as Memoranda are signed documenting the new rent, an invoice for back rent will be presented to the Tenant, and it could potentially be suffocating to any business.

How can a Tenant avoid back rent?

By triggering the rent review at the correct date if the Landlord has not already done so. My message is simple: do not rely on luck and ignore your rent review. The prudent way forward is to start the review on time and ensure any back rent payable is kept to a minimum.