Rent review—disregarding improvements
Rent review—disregarding improvements

The following Property practice note provides comprehensive and up to date legal information covering:

  • Rent review—disregarding improvements
  • What is an improvement?
  • When were the improvements carried out?
  • Who carried out the improvements?
  • Works carried out under an obligation to the landlord
  • Contractual obligation
  • Statutory obligation
  • Works carried out without consent

Rent review—disregarding improvements

What is an improvement?

By analogy with cases under section 19 of the Landlord and Tenant Act 1927, an alteration that:

  1. goes beyond repair, and

  2. from the tenant's subjective point of view improves premises

is likely to be regarded as an improvement.

Where an improvement carried out by the tenant, at its own expense and not under an obligation to the landlord, increases the letting value of the premises, it would be unjust for the tenant to be required to pay the resulting uplift. Consequently, both contractual and statutory rent review provisions generally direct the valuer to disregard improvements meeting those criteria.

When were the improvements carried out?

Rent review clauses generally provide that in order to be disregarded the improvement must have been undertaken during the current tenancy. However, when appropriate the tenant's advisers should extend this to cover any work done by the tenant before the commencement of the tenancy.

It will also be relevant where a tenant is taking a new lease on the expiry of a previous one. The Landlord and Tenant Act 1954 (LTA 1954) requires that the improvement must have been completed within 21 years of the application to renew, but that limitation may be inappropriate in a rent review clause, unless there have been a number of previous renewals.

Who carried out the improvements?

LTA 1954 refers to 'a person who

Popular documents