Expert says rent review changes should cover existing business leases

THERE seems to be a possible misapprehension, with far-reaching consequences, in regard to upwards-only rent review clauses in business leases.

The law has been changed by the Land and Conveyancing Law Reform Act 2009, which has just come into force. This provides that, irrespective of the wording of the clause, the rent may be reduced where this is necessary for a fair market rent.

However, the change only applies to new leases so it is of no help to hard-pressed business tenants. It is reported the attorney general has advised that to extend this change to existing leases would be “retrospective” and therefore unconstitutional. With respect, this view seems to me to be wrong in that retrospective change would be one which applied to rent reviews which had occurred or become due in the past – not to existing leases.