A lease of various buildings including a public house required the rent review to be carried out on the premise that the demise consisted of a bare site. The issue was whether the terms of the hypothetical letting and the valuation formula were to be the same as in the lease itself or whether they should be those which the valuer regarded as reasonable for a lease of a bare site.
Held: Unless the rent review clause required some other test to be applied, the presumption was that the notional letting was to be on the same terms as the existing lease: ‘. . . rent review clauses may, and often do, require a valuer to make his valuation on a basis which departs in one or more respects from the subsisting terms of the actual existing lease. But if and in so far as a rent review clause does not so require, either expressly or by necessary implication, it seems to us that in general, and subject to a special context indicating otherwise in a particular case, the parties are to be taken as having intended that the notional letting postulated by their rent review clause is to be a letting on the same terms (other than as to quantum of rent) as those still subsisting between the parties in the actual existing lease. The parties are to be taken as having so intended, because that would accord with, and give effect to, the general intention underlying the incorporation by them of a rent review clause into their lease.’
Judges:
Nicholls LJ
Citations:
[1988] CLY 2069, [1988] 1 WLR 348
Jurisdiction:
England and Wales
Citing:
Cited – British Gas Corporation v Universities Superannuation Scheme ChD 1986
The lease had a five yearly rent review, to be the highest of the current rent the rack rental value at the relevant rate. The rack rent was calculated under a hypothetical lease containing the same provisions (save for rent). The tenant sought a . .
Cited – Equity and Law Life Assurance Society plc v Bodfield Ltd CA 1987
The court discussed the nature and purpose of rent review clauses: ‘There is no doubt that the general object of a rent review clause, which provides that the rent cannot be reduced on a review, is to provide the landlord with some measure of relief . .
Cited by:
Applied – Laura Investments v Havering ChD 1992
The land was undeveloped when let to the tenant, who covenanted to build on it. On the rent review, the landlord contended that the rent should be calculated on the developed value, rather than in the condition as originally let.
Held: In the . .
Cited – Hemingway Realty Ltd v Clothworkers’ Company ChD 8-Mar-2005
The lease provided for a rent review under which the rent might either be increased or decreased. The landlord had chosen not to exercise the clause in view of falling rents. The tenant purported to do so. The landlord said that it alone had the . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant
Updated: 10 June 2022; Ref: scu.187393
