Landlord rent increase too high !

[Fuzzy bear]

Hi, I have a 20 year lease on a property with a monthly rent of £1000 month. The lease agreement says rent increase every 3 years based on current market value.
So my first rent increase is coming. Landlord has increased it to £1600 a month which is a 60% rent increase in 3 years ? It is a fast food takeaway and since we took over, business has been doing really well which is the reason why landlord thinks I can afford to pay 60% rent increase. Is this unreasonable ? I am waiting for solicitors advice but wanted to know if anyone else experienced similar situation ?

 

[Martin Patfield]

You are a business. Negotiate.

 

[fisicx]

What are the current market values locally?

Maybe your £1000/month was too low and the correct figure is £1600.

You can also expect it to continue to rise every 3 years.

 

[Paul Kelly ICHYB]

The lease agreement says rent increase every 3 years based on current market value.

As mentioned, your initial rent may have been well below market value.

Ask the landlord to prove/justify the rise and do your own research.

What did your solicitor say about this clause when they checked the lease, before you signed it?

 

[White Collar Legal]

Most well written leases will say if you don't agree you can have the rent assessed by an independent surveyor.

 

[Lisa Thomas]

Is £1,600 the market rate for a unit of your size etc?

 

[Jass T]

Hi, I have a 20 year lease on a property with a monthly rent of £1000 month. The lease agreement says rent increase every 3 years based on current market value.
So my first rent increase is coming. Landlord has increased it to £1600 a month which is a 60% rent increase in 3 years ? It is a fast food takeaway and since we took over, business has been doing really well which is the reason why landlord thinks I can afford to pay 60% rent increase. Is this unreasonable ? I am waiting for solicitors advice but wanted to know if anyone else experienced similar situation ?

Your question is it unreasonable is something someone on here can't really answer because each area is different.
You say the lease agreement says the rent review says the rent increase will be based on current market value. First thing I would do is ask the landlord to provide you with evidence of how the valuation was reached. Did he get a commercial property surveyor in to value it..?

 

[eteb3]

business has been doing really well which is the reason why landlord thinks I can afford to pay 60% rent increase. Is this unreasonable ?

It would be a breach of the lease terms. It’s not a turnover rent, so your profitability is irrelevant (as LL would be quick to tell you if you weren’t doing so well) The question is whether it's a market rent.

Whether it’s reasonable or not is irrelevant, unless theres a term in the lease that says rent rises have to be reasonable.