Rent Reviews – Time is no Bar
19 Jul 2010
In the recent case of Bello –v- Ideal View the High Court has found that a delay of 13 years in triggering a rent review did not prevent the Landlord from implementing the clause.
The decision affirms the longstanding principle that time is not generally of the essence in rent review clauses and is of course comfort to Landlords as they will not lose the right to an increase if they overlook a rent review.
The premises in question had been let on a 50 year Lease at a rent of £60.00 per year with a review in March 1994. The review clause did not set an end limit for the review and stated that in the event of a late review the existing rent would continued to be payable and any uplift will become payable on the first quarter day after the determination of the review.
Mr Bello bought the premises in July 2005, the terms of the sale excluded the seller’s liability for arrears of rent above £60.00 per year. The review had not been triggered when Ideal View bought the reversion in March 2006.
Ideal View subsequently started the review process, the matter was referred to arbitration and in August 2007 an award obtained increasing rent to £1,750.00 per year. Ideal View claimed the increased rent from March 1994 and Bello failed to pay, with Ideal View commencing proceedings for possession based on the rent arrears.
The claim was not statute barred as the increased rent did not become due until the first quarter day after the determination on 8th September 2007. The clause did not make time of the essence and the delay of itself was not sufficient to prevent a Landlord from implementing a rent review.
This decision contains some important lessons for tenants in particular. If a tenant wants to complain that the Landlord has delayed in implementing a rent review then he should raise these issues with an arbitrator rather than by way of defence to a claim for any increased rent. If he wishes to bring a rent review to a head then he should serve notice making time of the essence and require the Landlord conduct the rent review. If a Tenant does not do that then he runs the risk that at a later date the Landlord will serve a review notice. Additionally any assignee of a Lease should seek evidence regarding any rent reviews that should have been completed prior to the assignment.
The case confirms that Landlords can initiate historic rent reviews where the Lease allows a Landlord who buys a reversion should clarify with a seller whether there has been any communication with the tenant that might amount to representation that the rent review would not be implemented or that had made time of the essence.
