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GLOSSARY

Turnover rent definition

Published by a LexisNexis Property expert

What does Turnover rent mean?

rent, the amount of which is calculated by reference to the turnover or profits of a business.

This is a method of ensuring that rent is charged at a commercially fair value. Usually, the rent will be a percentage of turnover. It can be calculated by reference to profit, but doing so is fraught with difficulties and dangers.

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Turnover rent provisions

A turnover rent (also known as a ‘percentage rent’) is a rent that varies depending on the amount of trade which is achieved at the premises that have been let to the tenant. Turnover rents are most commonly used by landlords of shopping centres, factory outlets and similar multi-tenanted retail environments. This is principally because these locations provide environments which landlords can more easily control and manipulate.Types of turnover rentThere are various types of turnover rent. Which one to choose will depend on a variety of factors.The ‘100%’ turnover rentThe rent payable by the tenant is calculated purely as a percentage of the tenant’s turnover. Service charge and insurance rent are usually paid in addition to the turnover rent.This type of turnover rent is often used as an incentive to get a tenant to take vacant space, eg on a ‘pop-up’ or ‘meanwhile’ basis.The ‘top-up’ turnover rentThe rent is calculated as the greater of a fixed percentage of turnover or a percentage (invariably 100%) of the open market rent. Service...

Recovering rent, arrears and rates considerations in Scotland

RentRent is the sum due by a tenant to the landlord for use or occupancy of a property. The amount of rent must be ascertainable from the lease. This does not mean it must be stated for the whole term of a lease, but an initial rent must be identified, along with a mechanism (usually a rent review clause) to enable future rents to be ascertained. Rent is usually stated to be exclusive of VAT, payable without deduction and without demand. See Practice Note: Rent and rent review in commercial leases in Scotland.Commercial rents are usually paid in advance by equal instalments on the quarter days (28 February, May, August, and November), although English parties sometimes prefer to choose English quarter days (25 December, 25 March, 24 June and 29 September). Payment of rent monthly is also becoming increasingly popular. Where rent is payable quarterly in advance, the whole instalment is payable on the quarter day. This point can be important where a tenant seeks to operate a break clause...

Discover our 2 Practice Notes on Turnover rent

Report on title—occupational lease report for leasehold occupier

Report on title—occupational lease report for leasehold occupier Lease of [name of Property] (the Property) [Schedule [number]] Landlord: [details] (the Landlord) Tenant/you: [details] (the Tenant) 1 Particulars 1.1 Tenant The Tenant is [name] [of OR incorporated in England and Wales (company registration number [number]) whose registered office is at] [address]. For the purposes of this report, the term ‘Tenant’ includes successors in title. 1.2 Landlord The Landlord is [name] [of OR incorporated in England and Wales (company registration number [number]) whose registered office is at OR [address]. For the purposes of this report, the term ‘Landlord’ includes the person or persons from time to time entitled to possession of the Property when this Lease comes to an end. 1.3 Tenant’s guarantor [None OR The Tenant’s guarantor is [name] of OR The tenant’s guarantor is [name] incorporated in England and Wales (company registration number [number]) whose registered office is at] [address]. 1.4 Rent deposit [Yes. Details are set out in section 25 of...

Pandemic rent (and other payments) suspension clause [Archived]

Pandemic rent (and other payments) suspension clause [Archived] ARCHIVED: This precedent has been archived and is not maintained. Definitions (General) Competent Authority • any authority having jurisdiction in relation to the Property, its occupation or use; Restricted Period • any period [exceeding [number] [continuous] weeks] during the Term in which a Pandemic Restriction applies; Pandemic Restriction • any Legislation, or any requirement of, or guidance published by, a Competent Authority which: (a) arises out of [COVID-19 or the occurrence of any other OR any] national or local pandemic disease; and (b) prohibits, prevents or restricts: (i) the Tenant from [fully] [trading at the Property OR using [more than [number]% (measured by floor area) of] the Property for the Permitted Use]; [and OR or] (ii) more than [number] percent of the [other OR following] tenants in the Centre from trading[, namely [identify relevant tenants]].

Dive into our 5 Precedents related to Turnover rent