Standard Leases incorporate a mechanism for serving notice on the tenant to trigger rent review procedures. In many situations, the landlord specifies the proposed new rent and the tenant sometimes has a specified time within which to serve counter-notice.
It is important to be alert to a lease incorporating a mechanism where you run the risk of over running the counter-notice period and, more importantly, to check whether the lease requires you to serve a counter-notice incorporating a proposed lower rental value.
If the provisions of your rent review clause make "time of essence" then there may be a risk that you could agree to the landlord's proposal by default. Counsel usually advise that there is rarely recourse through the Courts in such inequitable situations.
Alterations and/or additions to the building should, even if not specified by the lease, be undertaken with the landlord's documented consent. All alterations and additions are better recorded through a licence.
It is not unusual to be instructed to represent a tenant only to be faced with a rental value applicable to a mezzanine/deck area which had already been paid for by the tenant in addition to the building's rental value. If such alterations are deemed to be attached to the building the Landlord can sometimes claim a rental value on these even though you might have already paid a full capital sum for such an installation.
It is comforting to have a lease with a tenant's option to break at predetermined dates. There will be mechanisms for serving notice which are usually easily understood. However failure to comply with all tenant's covenants in the lease can invalidate your notice to break. For example, the building might not have been brought precisely to the condition defined in the lease by the trigger date.
There have been many disputes between landlords and tenants where the tenant has contractually committed to an alternative property only to find that he has been unable to escape the liability of the redundant property through a faulty notice to break or failure to comply with certain covenants before the break date.
When the landlord or its agent enquires whether you would like to extend your lease, do not forget that by doing so you may be increasing the value of his investment. When clients receive such approaches and instruct us to negotiate an extension, we evaluate the enhanced investment value and negotiate a share of the increased value for our client.