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Rent review, breaches, alterations and insured risks

Managing Commercial Leases

Rent review

A lease with a term above 5 years is likely to contain rent review provisions. This ensures that the tenant is paying an appropriate rent, taking into account any changes in the local rental market. The most common type of review is an open market review but other formulas, such as an index-linked review or a rent linked to turnover, also exist.

Breaches of lease covenants

If a tenant is failing to pay rent on time or is in breach of other covenants in the lease, the landlord needs to take prompt, decisive action. Depending on the circumstances, this may include informal discussions with the tenant, sending reminder letters or taking the matter to court.


Most tenants will want to make alterations to their premises, to make them more suitable for the tenant’s specific use. Before doing so, a tenant needs to consider whether the landlord’s consent is required and whether planning permission or other third party consents need to be obtained.

Damage to or destruction of premises

Landlords usually insure the premises against a list of “insured risks”, with tenants reimbursing the premium. If the premises are damaged or destroyed, the consequences for the landlord and tenant will depend on whether the damage was caused by an insured risk or an uninsured risk and on what the lease says about such damage.

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