Rent Review Memorandum UK: Record Lease Rent Changes
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When rent goes up (or occasionally down) under a commercial lease in England and Wales, the change needs to be properly recorded. That is where a rent review memorandum comes in. It is a short, signed document that sits alongside the original lease and captures the new rent figure, the date it takes effect, and confirms that both landlord and tenant accept the revised position.
Without one, you can end up with disputes years down the line about what was agreed, when, and on what basis. Whether you are a landlord managing a portfolio of commercial units, or a tenant running your business from a leased premises, understanding how rent review memorandums fit into the wider picture of your lease is worth the effort.
What this document is
A rent review memorandum is a written record of the outcome of a rent review carried out under a commercial lease. It does not replace or vary the lease itself. Instead, it documents the new passing rent that has been fixed following the rent review process set out in the lease, along with the review date it applies from.
Most commercial leases of any length include a rent review clause. These clauses typically provide for the rent to be reviewed at fixed intervals, often every three or five years, and adjusted to reflect market conditions or some other agreed measure such as an index link.
Once the parties (or a third party determining the matter) have settled on the revised rent, the memorandum captures that conclusion in a clear, signed form. The document is usually fairly short. It identifies the lease, names the landlord and tenant, states the new rent and the effective date, and is signed by both sides.
Once completed, it is kept with the lease papers so that anyone looking at the tenancy in future can see exactly how the rent has moved over time.
How to use this document
- Check the rent review clause in the lease. Before anything else, read the rent review provisions carefully. The clause will set out when reviews happen, the mechanism used (open market, index-linked, stepped, or otherwise), whether reviews are upward-only, and the procedure for agreeing or determining the new rent. This sets the framework everything else follows.
- Trigger the review and negotiate the new rent. Either party (usually the landlord) serves the relevant notice or starts discussions in line with the lease. The parties, often through surveyors, then negotiate the revised rent. If they cannot agree, the lease will typically provide for referral to an independent expert or arbitrator to decide.
- Confirm the agreed rent in writing. Once the new rent is settled, whether by agreement or third party determination, the figure and the effective review date are recorded. At this point the parties can move on to documenting the outcome formally in a memorandum, which avoids any later confusion about what was agreed.
- Prepare and sign the rent review memorandum. The memorandum identifies the lease, the parties, the review date, and the revised rent. Both landlord and tenant sign it, often with a witness. Keep it filed with the original lease and any earlier memorandums so the rental history is easy to follow.
- Update records and deal with any knock-on issues. Update rent demands, accounting records, and any rent deposit arrangements so they reflect the new figure. If the lease is registered at HM Land Registry, consider whether any registration points arise. Diarise the next review date so nothing is missed when it comes around again.
Common questions
Q Is a rent review memorandum legally required?
There is no statutory rule forcing you to have one, but it is very strongly recommended. Leases frequently run for many years and change hands. A signed memorandum gives a clear, contemporaneous record of what rent was agreed and from when, which protects both landlord and tenant if questions arise later about the rental history or the outcome of a past review.
Q Can the rent go down at a rent review?
It depends entirely on the wording of the rent review clause in the lease. Many commercial leases are drafted on an upward-only basis, meaning the rent can stay the same or increase but cannot fall. Others allow the rent to move in either direction. Read the clause carefully, as the drafting determines what outcomes are possible.
Q Who usually prepares the memorandum?
In practice, the landlord's solicitor or managing agent often prepares the first draft and sends it to the tenant for review and signature. It is a relatively short document, but accuracy matters: the lease references, parties, review date, and new rent figure all need to be correct. Both sides should check it before signing.
Q What happens if we cannot agree the new rent?
Commercial leases almost always include a fallback mechanism. Typically this involves referring the dispute to an independent surveyor acting as an expert or arbitrator, appointed under the lease or by a nominated professional body. Their decision is usually binding. Once a figure is settled that way, a memorandum is then prepared to record the determined rent.
Q Does the memorandum need to be registered at HM Land Registry?
A standard rent review memorandum recording the outcome of a routine review under an existing lease does not usually need to be registered. However, if the arrangement goes beyond recording the review and actually varies the lease, different considerations can apply. If you are unsure whether registration is needed in your case, take proper guidance before signing.
Q What if the review date has already passed?
Late rent reviews are common. Most leases allow the review to proceed even after the review date, with the new rent backdated to take effect from the original review date. This can mean the tenant owes arrears once the figure is finally settled. The exact position depends on the lease wording, so check it carefully.
Q Do I need a solicitor to sort out a rent review?
For the rent negotiation itself, surveyors usually lead, as they handle the valuation evidence. Solicitors are often involved in checking the lease mechanics, dealing with notices, and drafting the memorandum once the figure is agreed. For anything non-standard, or where there is disagreement about procedure, it is sensible to get legal input early.
Sources
This guide is based on primary UK law and official guidance.
- LegislationLandlord and Tenant Act 1954legislation.gov.uk
- Guidance · UK GovHM Land Registry guidance on commercial leasesgov.uk
- Guidance · UK GovRenting business premises (gov.uk)gov.uk
Legal disclaimer
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.