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 declaration that this was to exclude only the rental value, not other provisions as to rent.
Held: The lease was to be construed according to its underlying commercial purpose, and the review should assume a lease containing the same review provisions. As to the general purpose of a rent review clause: ‘There is really no dispute that the general purpose of a provision for rent review is to enable the landlord to obtain from time to time the market rental which the premises would command if let on the same terms on the open market at the review dates. The purpose is to reflect the changes in the value of money and real increases in the value of the property during a long term.’
Judges:
Browne Wilkinson VC
Citations:
[1986] 1 All ER 978, [1986] 1 WLR 398
Jurisdiction:
England and Wales
Cited by:
Cited – Arnold and Others v National Westminster Bank Plc CA 14-Mar-1994
There was no power to remit a case to an arbitrator after a later court decision decision which showed that the law applied by the arbitrator was wrong. The arbitrator’s award was on the basis that a new lease should contain a rent review, but the . .
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 – Basingstoke and Deane Borough Council v Host Group Limited CA 1988
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 . .
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.
Arbitration, Landlord and Tenant
Updated: 21 June 2022; Ref: scu.180567
