Rent Reviews, Reform and What Comes Next

What happens when you put thousands of commercial property professionals in one (virtual) room and ask them what’s really keeping them up at night? 
In this episode, head of legal training Richard and host Lizzie answer the most pressing questions from our latest commercial property webinar which had over 4,000 registrants. 

From the proposed ban on upwards-only rent reviews to the evolution of security of tenure under the Landlord and Tenant Act 1954, Richard discuses where the market is heading.

Richard and Lizzie discuss:  

•Rent review clauses 
•How landlords are using (and testing) redevelopment breaks 
•The risks around leases, licences and tenancies at will 
•The cases everyone is talking about, including AP Wireless II v On Tower UK Ltd and Lamba v Enfield LBC 
•Service of notices

If you’re involved in commercial property, whether advising, negotiating or making strategic decisions, this episode will give you a sharper sense of what’s coming next.

Relevant cases:
•AP Wireless II v On Tower UK Ltd [2025]
•Lamba v Enfield LBC (2025)
•Park Cakes V Caterpillar Property Limited (2026)
•White v Alder [2025]
•Davies v Bridgend County Borough Council [2024]
•Spirit Pub Company  (Managed) London V Pridewell Property Limited [2025]
•Blunden v Frogmore Investments Ltd [2002]

Training & Free Webinars for Property Professionals:

Would you like to keep up to date with the latest in real estate law? Davitt Jones Bould offers legal training tailored to your organisation’s needs, delivered in person across the UK or remotely. We also run free monthly webinars through for surveyors, solicitors, and property professionals across sectors. To sign up or learn more, visit our events page here or email djb.events@djblaw.co.uk for information and booking. 

This podcast is for informational purposes only and is not intended to provide legal or professional advice. No liability is accepted by Davitt Jones Bould for any reliance placed on its content.

Transcript

Lizzie Collin
Welcome back to the Unpacking the Case podcast. In this episode, we're answering questions that came out of our latest commercial property webinar. With over 4,000 registrants, there are a lot of questions, and that probably tells you everything you need to know about how much uncertainty there is in the market at the moment. So what we've done is pull together the themes that kept coming up and use this episode to work through them properly. We'll be talking about the proposed changes to rent reviews, particularly the debate around upwards only clauses, and how that might play out. We'll also look at security of tenure under the Landlord and Tenant Act 1954, development breaks and some of the more technical but critical points around things like notices and tenancy status. Alongside that, we'll touch on some of the recent cases that our audience are asking about. Let's get into it. Hi, Richard.

Richard Snape
Hello, Lizzie, and how are you? What have you been up to lately?

Lizzie Collin
I'm very well, thank you. I have been busy, but never too busy to record a podcast with you. So we did a webinar a few weeks ago now on it was a commercial property update webinar, and it was extremely popular. We had our highest numbers to date. But as a result, we also had loads of questions that we didn't get a chance to answer. So we're here to answer them now. How many was that, sorry?

Richard Snape
4,600.

Lizzie Collin
4,600, yeah. So no shortage of questions. Should we make a start? The first load of questions were all to do with rent reviews and the proposed upwards only ban, which is obviously very topical. So question one, will rents increase in line with RPI/CPI be affected?

Richard Snape
Yeah, I mean, the answer is yes. Any the upward and downward rent review provisions in the English Devolution and Community Empowerment Bill basically say that if there's a rent increase, there can be a rent increase and you don't know in advance what the rent increase is going to be, then it'll be subject to the upward and downward rent review and that will include the retail prices index and consumer prices index, yeah. Turnover rents as well.

Lizzie Collin
Do you expect a shift to stepped rents or index links reviews instead of traditional reviews?

Richard Snape
I'll leave that to the surveyors and the valuers, but I think that, well, fixed increases, stepped rents and fixed increases that you know in advance won't come within the ban. So they might sort of at least partially be based on stepped rents. As to RPI, that will come within the ban, as I mentioned. But if you look over a period of time, it's more likely than not that, well, RPI will have a rent increase. You know, RPI doesn't fall systematically year after year after year. So possibly. I think there's another thing, another way of avoiding a large number of properties, the consequences, and that's Have shorter leases without rent review is the most obvious thing. Not always.

Lizzie Collin
So should landlords stop including upwards only wording into heads of terms now?

Richard Snape
No, it's not going to be retrospective with one provision. And that's the options to renew including rent review, which was introduced into the House of Lords by the government. So no, I wouldn't do anything yet. It's not going to be until 2028, I would imagine, until something actually happens.

Lizzie Collin
Okay, and there's a couple of questions about when the ban applies. So does the ban apply to lease extensions or supplemental deeds?

Richard Snape
Well, a lease extension is a brand new lease and if it's a brand new lease, then it's going to post whatever the implementation date is, then it's going to sort of kick in. It's a surrendering grant of a new lease to be precise.

Lizzie Collin
And what about agreements for lease entered into before implementation?

Richard Snape
That's specifically excluded if you've got a contract before the legislation is entered into. I've got to point out that none of this is passed fully through Parliament, yet it might be subject to amendments and regulations and the likes, but as it stands at the moment, a pre-commencement agreement for lease won't kick in the upward and downward review.

Lizzie Collin
And finally, what about options to renew exercise to post implementation?

Richard Snape
Well, that was the thing that was introduced by the government into the House of Lords on March the 17th and basically says if you've got a March the 17th onwards option to renew with a grant review, then as it stands at the moment, it hasn't been scrutinised particularly yet, but that will come within the legislation.

Lizzie Collin
Next question's asking, will landlords be forced to vary existing leases?

Richard Snape
No, not at all. It's not going to be retrospective. They'd have all kinds of human rights claims on their hands. I suspect they might know that.

Lizzie Collin
My favourite topic, collars and caps, caps and collars. What happens to long leases with RPI CPI caps and collars post 2030?

Richard Snape
I don't know if you want to answer this one, Lizzie, because you. Yeah, this is your forte. But they, you should never have told me, you know, what a color is.

Lizzie Collin
I know. And all I knew was the word. I don't actually know what it means.

Richard Snape
What you're alluding to is the fact that by February 2030, the government is saying that they're going to get rid of RPI as a means of calculating various things and official means. to be replaced by consumer price index and housing, which will reduce the the kind of percentage, if you like. All it does. It doesn't get rid of Rpi. It just basically, it's a different way of calculating Rpi, which is going to be more beneficial to tenants in the context of rent review, at least, at least if based on Rpi. So No, in terms of caps and collars, the government were saying initially that they might introduce separate regulations, which in some circumstances allow rent collars if there's a corresponding rent cap, a maximum and a minimum rent. So yeah, but no doubt you'll have a look at that for me and let me know when it comes in.

Lizzie Collin
Can index linked reviews still be used in new leases?

Richard Snape
Yeah, there's nothing stopping them. I say there's a lot of myths about what's going to happen, what's supposedly going to happen in 2030. It's not that it disappears as a form of index linking. It's just that the method of calculating will be based on CBIH, Consumer Prices Index and Housing.

Lizzie Collin
And why shouldn't rents fall if the market doesn't support them?

Richard Snape
I think landlords need a guaranteed cash flow. That's the argument. I can see the argument against that. I think my main concern is, as well I mentioned in the actual course itself, that the avowed intention of the legislation is to help the high street retail sector. If rents reduce, then why shouldn't you have the markets going downwards? Why shouldn't you have a rent review that goes downwards with it? Most high street, the vast majority of high street retail is three or five year leases. They wouldn't have rent reviews. And I think in the future, if you want to avoid that, that's the obvious reason. If it's a kind of lease, I mean, tenants want in the high street, they want three or five year leases because they don't want to be bound. They want flexibility, have done for many a year, even more so post-COVID.

Lizzie Collin
Thank you. Does the legislation apply to excluded leases?

Richard Snape
Yes, it does. As long as you come within section 23, the definition which has been amended to, so you don't need to be an occupation. Yeah, it applies to 54 Act excluded leases.

Lizzie Collin
If a tenant exercises a renewal option in a pre-reform lease, do the new rules apply?

Richard Snape
This is this, I think we've mentioned that before. This was this amendment which was introduced into the House of Lords. on March the 17th, which basically says if you've got an option to renew in a lease, that's the one situation that would be retrospective if the option to renew includes event review. But we'll have to see with that. So it was a government amendment, so it'll almost certainly, I suspect, get through.

Lizzie Collin
Next question, can a tenant renew only part of the holding?

Richard Snape
This is sort of not about upward and downward rent reviews, I'm assuming. Basically, you can agree whatever you like on the 54 Act renewal, but in the absence of agreement, section 32 of the Act says that the tenant's entitled to the holding held by themselves at the time of the court hearing, and the landlord can at their behest require them to take on sort of, you know, a greater part of the holding is basically the the part that they're in possession of at the time of the only court hearing. There's a case about it, 2024 Sainsbury's Supermarkets and Medley Assets, if you want to have a look at it.

Lizzie Collin
Can a landlord insist on a development break where works don't require possession?

Richard Snape
If the landlord can basically, if they reserve the right to kind of enter the premises to carry out additions, alterations and improvements, then as long as they are not breaching quiet enjoyment, they should be able to, just use the clause in the lease. If it doesn't require possession, which allows them to go in. If they are going to carry out substantial works, so the tenant basically can't do their work. It's just one of the things in the Spirit Pub Company case that we, Pridewell properties that we looked at. If it's substantial, so you know, the tenant can't really carry out their works, if you like, or they're professional, then no.

Lizzie Collin
So moving on to redevelopment, if a redevelopment break is exercised, must the landlord actually redevelop or is it just a tactic to remove tenants?

Richard Snape
If the landlord is making misleading statements or representations, they could be sued for any loss under Section 55 of the, sorry, under Section 37A of the Act, which used to be a separate, different version, Section 55, it used to be. And they would, we got a case that I didn't, I don't think, I went through McDonald's and Shirayama, Shukasan, which is all about that. You could use the development break ground potentially and then find it's whether you've got a real chance or a real prospect or reasonable prospect would a personal business take the risk. And it's not impossible that the landlord successfully used, you know, sort of the intention to develop ground F, but then found for whatever reason they couldn't go ahead with the development.

Lizzie Collin
I guess this is a similar question. Can redevelopment be used strategically even where works are not strictly required?

Richard Snape
The answer is no, that was settled by the Supreme Court at the end of 2018 and S. Francis and Cavendish Hotel said there's a but for test if, but for the fact that the tenant's still in occupation, would you still want to do the work? So in S. Francis, they carried out various, well, they were intending, they said, the landlords, to carry out various works, including, which weren't really needed just to get rid of the tenant, including knocking down a dividing wall, and rebuilding it in exactly the same place with exactly the same materials. And they failed in that case, S. Francis, St. James Art Gallery and the private shop. You have a private shop where you, uh, where they were selling fancy tapestries in the rugs. You can probably see something.

Lizzie Collin
Sounds like your kind of shop, Richard.

Richard Snape
Yeah, I often go there when I, sometimes you wake up in the morning, Lizzie, and you think I need a fancy tapestry and I'm off to, uh, German Street of London and parading out my fancy tapestry.

Lizzie Collin
Moving on to talk about reversion releases, does the Park Cakes case affect whether reversion releases fall within the Act?

Richard Snape
Well, this is another one of your expertise, Lizzie. Because Colin the caterpillar cakes. Cakes produced Colin the caterpillar cakes for Marks and Spencers. And yeah, I mean, reversion release, I'm assuming they're talking about the Landlord and Tenant Act 1954 as opposed to the upward and downward reviews, which isn't an act yet anyway. But yeah, reversion releases are different from agreements for lease. Section 28 deals with agreements for leases. An agreement for lease is something which you've got a contract to create a lease in the future and that's what section 28 basically applies to. A reversioning lease, you're granted the lease now, it's just that you can't go into possession until a future date and that's the real difference. Reversioning leases, you can't have a lease that comes into possession more than 21 years in the future under section 149 subsection 3. and the Law of Property Act 1925. I remember that from my university law lecturing days.

Lizzie Collin
Excellent. So moving on to a few questions about tenancy status. So the first one being, when does a tenancy at will become a periodic tenancy?

Richard Snape
It sounds like a joke. I don't know. When does a tenancy at will become a periodic tenancy, Lizzie? But the answer is we used to think we knew. we don't because of some various cases of late, including that one of the AP wireless non-tower cases. And so one or two of the older cases, holding NHS property services, they basically, if you have asked me in the past, if there's no negotiations going on and you've got a tenancy at will, if you then start paying the rent and the landlord accepts it, I would I've said, certainly when a pattern emerges, there's a tenancy, there's a periodic tenancy which can be within the 54 hours tenancy, it will, can't be. But it's been fudged a bit by some of the recent cases. If I was a land, well, if I was a landlord or a tenant, I would assume that if I start collecting rent and like, especially if there's no negotiations for a lease or a new lease going on, then I'd assume it was a, it might become a periodic tenancy and I'd get the 54 Act excluded. What's my motto, Lizzie?

Lizzie Collin
If in doubt, contract out.

Richard Snape
That's it. My catchphrase.

Lizzie Collin
As seen in the Estates Gazette.

Richard Snape
Yeah, apparently.

Lizzie Collin
Next question is, should landlords always document tenancies at will to avoid risk?

Richard Snape
Yeah, in spite of the cases, I mean, some of the cases I mentioned are ways of getting landlords, people off the hook when they've already made a mistake. It's best not to make a mistake. If you're going to create a tenancy at will, create it expressly. In spite of the cases, you know, which have said you can have 15 years of tenancy at will, I would keep it short whilst you negotiate the final lease. And in spite of the cases, including Court of Appeal cases, if you're negotiating, I'd still be reluctant to accept rent in advance. I think we've answered the next question.

Lizzie Collin
If no term is specified, but there is rent and exclusive possession, is it a lease?

Richard Snape
There's got to be a fixed maximum duration for it to be a lease, and that's what the other AP wireless and on tower case was all about. But if you've got exclusive possession for a term at a rent, then it's a lease unless there's an exceptional circumstance. They did some House of Lords in 1985 Street in Mountford that if you've got exclusive possession for a term of rent, it's going to, I'd assume, a lease. And if there's no specific term, then you've got an issue. If it's a periodic tenancy, the idea is that you know from the beginning what notice to terminate that particular period. And so that's valid. The exceptions are things like caretaker service occupiers for the best performance of their job. And we did a few cases on guardianship schemes, people who basically sort of live in properties that are pending them being demolished or being rebuilt or whatever to stop trespassers getting them. Mail licenses, generally English is exclusive possession for return.

Lizzie Collin
So there were quite a few cases that you covered during the webinar. One of them was AP Wireless 2 and on Tower UK Limited. Should this case have created a periodic tenancy?

Richard Snape
The Court of Appeal said not. There was no fixed maximum duration in AP Wireless because it was for a minimum term of 10 years and then no earlier in the end of 10 years. either side could get 12 months notice and I can understand how they could say that that's no fixed maximum duration, so it wasn't a lease. Whether it depends on the fact it's sort of specific to communications equipment and the likes is not a matter. But they talked about but ignored the standard Supreme Court House of Lords case from 1992 of Prudential and the Londoners injury body, which is the council, they were called GLC and their successors could use, could only get possession when the land was wanted for rd widening and that was no fixed maximum duration but it wasn't a lease and they were paying the rent yearly and it was decided that was a periodic tenancy but they just seemed to have ignored that and preferred a case called which was only over to a decision called Beresford and Maxfield Housing but bad decision.

Lizzie Collin
Does A rolling break clause undermine a fixed term?

Richard Snape
No, I mean, it's got to be a fixed maximum duration. So a break clause is, you know what the maximum duration is, it's just that you can break it early, just like you could affect forfeiture early, or have a notice that quit early or whatever. Surrender.

Lizzie Collin
Another case you looked at was Lamborough and Enfield. What do you think practitioners should be cautious relying on this case.

Richard Snape
I can't see that Lamber in Enfield's correct. It basically, it was between Section 196 of the Property Act and Section 23 of the Landlord and Tenant Act and Section 23. Well, the courts have decided that if you use Section 23 notice, then Even if it's returned the moment that, you know, if you've used recorded special delivery, the moment it's posted, it's deemed to be served. Section 196 expressly says if it's returned, it's not served. But nevertheless, in Lambert, where they'd said that, you know, you shall use Section 196, they decided by implication you can't use Section 23. I think a lot of people think it's wrong. Just in case it's right, I think look at the words of the lease and if it does say shall use Section 196, then I'd use, well, basically what you could do is sort of just deliver it personally, pin it to the front door. It goes against the Court of Appeal case called Blundon and Frogmore as far as I can see.

Lizzie Collin
So another case was White and Alder. Does this case extend to boundary obligations?

Richard Snape
It was all about informal boundary agreements with White and Alder. And actually, we did a podcast on this and it was new last summer. And it goes back to principles that go back as far as, I think it was 1750, Penn and Lord Baltimore and the Mason-Dixon line in America when there was still a colony. But they, but an informal boundary agreement can be binded, even though the purchasers don't know about it, which is why the CPSE inquires or changed last autumn. But it's not boundary obligations, that's more to do with who actually has the obligation to maintain the boundary feature. There was a case a few years back called Lanvir v Chandler, which basically said T marks. on your plan, don't necessarily tell you who, don't tell you who owns the boundary feature, it just tells you who's bound to maintain it. So not really, no. There was a case called, I think it was Second and Derwent Court of Appeal case, which did say that the T marks were, you know, strong sort of evidence of who owns the boundary feature. but writing orders about boundary agreements?

Lizzie Collin
And the Bridgend CBC case, what determined liability timing in that case?

Richard Snape
It's the Japanese knotweed liability, where Mr Davis purchased his property in Bridgend in 2004 when there was already Japanese knotweed, not on the land, but on a cycle pattern by the council behind his wall. The Royal Institution of Chartered Surveyors produced reports about Japanese knotweed dangers in 2012, and the council should have, they said, done something about it by 2013. And they didn't until 2018, but because he'd already bought subject to, you know, there'd already been Japanese knotweed on the other side of his wall, there was no liability of the council. Actually, in 2020, and they've reiterated since, Rick said that, Japanese not weed, only in exceptional circumstances will it cause any kind of structural damage. It's not as dangerous as buddleia next to your house apparently. And of course the next big one is going to be bamboo. That's the next one. And various other prohibited substances. Prohibited plant, curly water weed, that's illegal to cause it to be propagated in the wild. And duck potato lizzie. A potato, half duck, half potato.

Lizzie Collin
Yeah. Things to look out for.

Richard Snape
It's been genetically engineered for Sunday much?

Lizzie Collin
Moving on to service charges, does consultation section 20 apply to long leaseholders who sublet?

Richard Snape
Yeah, Landlord and Tenant Act 1985, section 20, it's that cloister's case. Cloisters, business, whatever, management company, and Vari, which said that mixed-use premises might come within the provisions whereby you have to go through service charge consultation and the likes. If there's a sublease, I think section 36 with minor definitions and the 85 Act says it'll apply both the tenant and the sub-tenant will have the rights and the landlord head landlord and the intermediate will have the obligations. So yeah.

Lizzie Collin
So final question around binding agreements. Is an e-mail disclaimer enough to avoid a binding contract?

Richard Snape
Yeah, well, these are the cases that said the emails can give rise to contracts in the land under Section 2 of the Law of Property Miscellaneous Provisions Act and be in writing and signed and contain all the expressed terms. in one document or comply with Section 53 and transfer beneficial interests in the land. For the contract point for Section 2, you should make it clear it's subject to contract. And otherwise, I mean, one of the cases, Hudson and Hathaway, it was a residential family breakdown case. But he just finished his e-mail by saying, kind regards Lee. His name was Lee Hudson. That was his signature. And that caused him to transfer half the beneficial interest in his house. I think you made clear in your emails that nothing on this e-mail constitutes a legally binding agreement. And also make sure that you never e-mail somebody saying you can have my house. Kind regards, Richard. That'd be fatal. And I think that's it, isn't it, Lizzie?

Lizzie Collin
That's all of them. Thank you, Richard.

Richard Snape
My pleasure is always, Lizzie.