The case of Bello v Ideal View was a useful reminder for landlords of the potential consequences for a tenant where the tenant has previously ignored a rent review or the parties have failed to record a nil increase.
In Bello, a rent review due under a lease in 1994 was not pursued by the landlord until 2007. The tenant took no part in the rent review arbitration which followed and did not appeal against the new rent. After the determination of the revised rent by the arbitrator, and in accordance with the lease terms, the landlord claimed the increased rent due for the entire 13 year period between 1994 and 2007.
When the tenant failed to pay the sum owed, the landlord sought possession of the premises. The tenant's defence was based on limitation, given that the rent review had not been determined for 13 years. However, the Court dismissed this argument as the lease clearly provided that the increased rent was not due until after the determination by the arbitrator. The Court could see no reason not to enforce this lease provision and it could find no requirement for the rent review to have taken place within a particular time period.
The Court also noted that the tenant should have raised his complaints before the arbitration decision had been made. The tenant therefore failed to avoid his liability for the reviewed rent. Landlords may well find it surprising that a delay of 13 years did not prevent a landlord from pursuing an outstanding rent review. Of course, the position would have been very different if a rent review memorandum had been completed to document a nil increase.
Similarly, the tenant would not have received quite such a nasty shock – and the threat of losing his premises – if the reviewed rent had been negotiated and agreed in a timely manner. Unfortunately for the tenant in this case, there were no circumstances to prevent the landlord from enforcing the rent review provisions and pursuing the outstanding rent.
Landlords might therefore find it useful to check through records they have of rent reviews which are still outstanding to see whether these might still be implemented.
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.
