Rent problems

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Related tags: National minimum wage, Minimum wage, Lease

Dear Editor, Although Scottish & Newcastle, like others, seeks to market new styles of lease, tenancy and “franchise” agreements, all seem to...

Dear Editor, Although Scottish & Newcastle, like others, seeks to market new styles of lease, tenancy and “franchise” agreements, all seem to miss the fundamental issue of defining rent, preferring to market assignability as the attraction when in fact the lessee would like to make a living at least equal, if not better, than the National Minimum Wage for their hours of involvement (The Publican Newspaper, March 5).The old chestnut put forward by all these companies is that it should be “the market rent”. In reality rent is based not on turnover but should properly be on a percentage of the probable divisible profit of the property with some adjustment for special lease terms. Where there is a supply tie causing higher than open market prices then this price differential is a wet rent and should be treated as part of the total rent.Until these companies properly define rent in their leases the lessees will always be at a disadvantage. Furthermore, at rent reviews without a formula generally the only route to solution is through the unsuitable sole direction of RICS.Brian Jacobs, accountant, Bristol

Related topics: Property law

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