Gillham: beware of rent review pitfalls

Fleurets director Barry Gillham has outlined the major pitfalls to avoid when conducting a rent review.

Speaking last week at the launch of the Association of Licensed Trade Accountants launch, his first point was to never ignore anything that is sent by the landlord.

"Sometimes time is of the essence in respect of certain offers," explained Gillham. "For example, the right to have a dispute settled by a cheaper independent expert route must be accepted within 28 days or you only have the more expensive arbitrator route with one well known company."

For lease renewals, Gillham advised employing a solicitor because missing a deadline for a legal notice can have a penalty. "I would never deal with a legal notice myself — even as a qualified surveyor," said Gillham. "Instruct a solicitor."

He added: "If the tenant is offered a lease renewal before it is needed, take up negotiations." Gillham told the accountants that the legal obligations of the Landlord & Tenant Act 1954 can be very expensive, so advised avoiding them if possible. "But protect your client's legal rights when necessary," he added.

Anything in writing must have 'without prejudice' at the top, advised Gillham. This includes sending ac-counts or VAT returns to the landlord. Gillham explained: "This means anything said in negotiation cannot be used if you ultimately need to go to arbitration. Only the final rent-review memorandum or any legal notices should not be marked 'without prejudice'."

His penultimate point was to be friendly in your negotiations with the business development manager.

And, finally, Gillham told attendees to be prepared to spend a lot of time in negotiations. He said: "I spend two days at least in reaching an agreement — and I have most of the facts at my disposal."

He told delegates to talk to local licensees and get the facts about the deals they have achieved. "Publicans saying 'I can't afford it — you must be joking' are not acceptable negotiating tactics," said Gillham.