UK: Rent Reviews In Lease Renewals – Are Tenants Missing A Trick?

Last Updated: 28 May 2009
Article by Mike Hoye

In the early 1990's the last recession saw a flurry of cases on whether, on a business lease renewal, a rent review should be both upwards and downwards. It is a point which seems to have been overlooked by tenants' advisers in recent years and upwards only reviews have been and remain the norm, especially where the existing lease has an upwards only review. The current economic climate (not so much the recession as the atmosphere of uncertainty) does however raises the question of whether tenants' advisers should be looking to achieve the benefit of an upwards/downwards review for their clients.

The reluctance on the part of tenants' advisers to take this point may perhaps be down to the statements of leading commentators on the relevant case law. For example:

"The court has power to order the inclusion of an upwards only rent review clause. This power is likely to be exercised where the current tenancy contains such a clause" (Woodfall).

"If the previous lease included an "upwards only" rent review provision and that can be shown to be in accordance with current market practice then it would seem that the new lease should contain a similar provision" (Hill and Redman).

It is of course the case that the majority of business leases coming up for renewal (where the term has been of sufficient length) do contain upwards only reviews and this remains in line with current market practice for the grant of new leases. But is this the end of the argument? The statements of the commentators are not unequivocal and an examination of the cases suggests that the position is far from settled. Is there scope for tenants to argue for upwards/downwards reviews on renewals? The following points are worth considering:

What Do The Cases Say?

A number of the cases which will have informed the commentators' views are at County Court level only and therefore do not create binding precedents. There are however three High Court decisions:

Stylo Shoes Limited v Manchester Royal Exchange Limited 204EG803, [1967] EGD 743

There had been no rent review in the previous lease. The tenant wanted an upwards/downwards review to allow for a lower rent if market conditions determined, which was recognised then as being very unlikely. The judge held that, although the point was rather academic, he saw no reason why "sauce for the goose should not be sauce for the gander" and decided that the review should be upwards/downwards.

Janes (Gowns) Limited v Harlow Developments Corporation [1980] 1EGLR52

Again there had been no previous rent review. The judge followed the Stylo decision, holding that the review should be upwards/downwards and basing his decision on the evidence before him that rents may go down as well as up.

Charles Follett Limited v Cabtell Investment Co Limited [1986] 2EGLR76

Here there had been a previous review which was upwards only. The judge decided that the rent review in the new lease should also be upwards only, distinguishing the decision in Janes on the basis that no evidence had been put before him that rents might go down and also because the existing lease did have an upwards only review which the judge stated was a factor. He made it clear however that he was not prevented by the presence of this clause from exercising his discretion to allow an upwards/downwards review because Section 34(3) of the Landlord and Tenant Act 1954 gave him an unfettered discretion on the point.

What can we deduce from these decisions which together form the precedent base on the issue of upwards/downwards rent reviews on renewal?

  1. The court has a discretion under Section 34(3) to order upwards/downwards reviews.
  2. The court is unlikely to exercise that discretion unless there is evidence that rents can go down as well as up.
  3. The existence of an upwards only rent review in the existing lease is a factor but it is not a determining factor.

In 1992 there were three reported County Court decisions.

Boots the Chemists v Pinkland Limited [1992] 2EGLR98

It is not clear whether or not the existing lease had a rent review as the judge did not comment on this. He considered the decisions in Stylo and Janes but it would appear that Follett was not argued before him. He followed those decisions by giving an upwards/downwards review. Evidence had been provided that rents could go down as well as up and the judge based his decision on the reason that "if it be the case that we are now in the incipient stages of a prolonged bear market then present-day rents will seem exorbitant later in this decade and in the beginning of the next century. As a consequence, fixed rents, or rents which can be only revised upwards, will wreak the same sort of injustice upon tenants as that which has been suffered by landlords in previous decades when leases contained no provision for rent review at all. On the other hand, if the present period of decline in rental values is merely an aberration in a continuing bull market, the landlords will in no way be prejudiced by the inclusion of a provision for the rents to be reviewed downwards as well as upwards."

Blythewood Plant Hire Limited v Spiers Limited [1992] 2EGLR103

The existing lease did not have any rent review provision. Again, the judge did not have the decision in Follett drawn to his attention but he did, in effect, follow it by distinguishing the decision in Janes construing the court's reasoning in that case more narrowly as being based on evidence that a neighbouring development might cause rents to go down and holding that, as there was no such fact applicable here, he did not have to follow it. Instead, he found that an upwards/downwards review would make the landlord's interest more difficult to market and would therefore have an immediate impact on the value of the landlord's interest. It should be noted that the facts of this case were quite unusual because the landlord was in receivership and it was the intention of the receiver to sell. Clearly this was in the mind of the judge in balancing the interests of landlord and tenant.

Amarjee v Barrowfen Properties Limited [1993] 2EGLR133

Again there was no previous rent review and none of the above cases was referred to in the judgement. The judge nevertheless came to the conclusion that there was no reason to reject the tenant's proposal of an upwards/downwards rent review. One of his comments is particularly relevant at the present time. He said that "now that the unthinkable has started to occur, and property prices are falling, I see no reason why upwards/downwards clauses should not be incorporated in leases. They have the obvious merit of fairness..."

There has been one more reported case on the issues, again at County Court level, which was decided in 1993:

Forbouys Plc v Newport Borough Council [1994] 1EGLR138

Here there had been a previous rent review in the existing lease. The judgement contained a fairly full review of the existing authorities, although strangely, from the landlord's standpoint, Follett was again ignored. Instead the landlord sought to argue for an upwards only review based on the decision in Blythewood and (without citing the authority in Follett) picking up on the point that there was no prospect of a downwards review ever happening because rents were already rock bottom. The landlords argument would have been stronger if it had also relied on Follett because of the upwards only review in the existing lease but, even without it, the landlord seemed at one point in the judgement to be winning when the judge accepted that the shopping centre in which the property was situated was at the bottom end of the market and that "the recession is still bumping along at the bottom". The judge then referred to the House of Lords decision in O'May v City of London Real Property & Co Limited [1987] 2AC726 and the principle laid down there that the party proposing a change from the existing lease had to show that it was fair and reasonable in all the circumstances (more on that later). After stating that the facts of the case before him could be distinguished from the cases cited to him, found in favour of the tenant on the basis that upwards only would be unfair to the tenant and would not be fair and reasonable in all the circumstances. On the other hand, a rent review clause upwards and downwards would not be unfair to the landlord.

Section 34(3) Or Section 35?

It seems clear from the 1954 Act that Section 34(3) addresses rent review and Section 35 deals with the other terms of the tenancy but this is a point which many practitioners overlook. The distinction between the two sections is that it is only Section 35 which requires the court to have regard to the terms of the current tenancy. The principles in O'May do not apply to rent review provisions but with one important caveat. Section 34(3) only applies where the court is asked to determine the amount of the rent, which wasn't the case in Forbouys (hence the judge referring to O'May in his judgement). Therefore, whenever the court is asked to determine the rent and aspects of the rent review provisions, the terms of the current tenancy do not fetter the court which can do as it thinks fit. Authority for this is found very clearly in this statement from the judgement in Follett:

"I have an unfettered discretion under subsection (3) of Section 34 which simply provided that where the rent is determined by the court, the court may, if it thinks fit, further determine that the terms of the tenancy should include such provision for varying the rent as may be specified in the determination. Mr Neuberger says I must not place any weight on the terms of the present lease. He points out that under section 35 the court is directed to have regard to the terms of the current tenancy and to all relevant circumstances. He says that here I am not so limited and my approach shall not be that prima facie the terms of the existing lease should be carried into the new tenancy. I accept that".

The Purpose Of Section 34

One argument that does not seem to have ever been raised in this context is the essential purpose of Section 34 to determine "the rent payable under a tenancy" which is to be "that at which... the holding might reasonably be expected to be let in the open market". Can it not be argued that "tenancy" means the whole of the tenancy which, if long enough to warrant a review, should have the protection of an upwards/downwards one so that at no point during the tenancy does the Tenant find itself paying more than the open market rent?


At the moment, how many tenants' advisers are arguing for upwards/downwards reviews in renewal leases? Anecdotally, it appears hardly any and it does not seem to be putting it too strongly to say that this is something that landlords are getting away with because tenants are doing nothing. But if one looks at the principles laid down by the High Court cases, the court does have a wider discretion than many think and, in this area, is not bound by the terms of the existing lease. Furthermore, in these very uncertain economic times, can it ever be said that rents cannot go down as well as up bearing in mind that the review in question will generally be five years down the line. As the judge said in Boots, "I do not have a crystal ball". Yes, the existence of an upwards only provision in the existing lease is a factor but it is not a determining one and should not be seen as being incapable of challenge. In the reported cases, the scores were 2-1 in the High Court and 3-1 in the County Court in favour of upwards/downwards reviews. Those cases also contain a number of judicial statements to the effect that upwards/downwards reviews are fair and reasonable to both parties. There is also the unanswered question of whether an upwards only review is contrary to the spirit and the purpose of Section 34. Given all this, it is surprising that tenants' advisers seem so often to accept the status quo and meekly agree upwards only reviews in renewal leases. They have good arguments against this and should at least be raising them either with a view to winning the point or as a bargaining tool in the negotiation process generally. Failure to do so and to advise their clients that this is an issue from which they could profit could well be considered to be negligent, especially if in the future a tenant is brave enough to take this point to the Court of Appeal and win.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.