Tenants v Landlords
28 May 2025May 2025 – A silent war is raging between tenants and landlords.
This commercial purpose of a rent review, according to British Gas Corporation v Universities Superannuation Scheme (1987), and Equity & Law Life Assurance Society plc v Bodfield (1987), is to keep the rent in line with current property values having regard to the current value of money.
So a rent review to open market rent is only fit for that purpose if the methodology for the open market rent is supportive. Ideally, the open market should be tested but, as the tenant is in occupation, that is not allowed. Instead, a hypothetical scenario assumes that a market exists and that it is not necessary to identify who would want the premises, only to know that someone somewhere would.
The question then arises as to what rent this hypothetical tenant would agree? It is reasonable to assume it would not be less than a hypothetical landlord would agree. But, nowadays, according to surveyors when acting for tenants, the answer is the same as the passing rent and only as much as that because the rent payable after the review is agreed or ascertained would not be lower than the rent payable before the review.
Which means that such surveyors are acting for the actual tenant, not the hypothetical tenant. Their stance is subjective, not objective. This is all very well in negotiations for amicable agreement. After all, if the actual tenant succeeds in convincing the landlord to concede, all well and good.
It is, however, unacceptable on referral. The overriding duty to the ‘tribunal’ is for a reason. It is to reinforce the need to be professional, to be objective. So the surveyor has a conflict of interest: on one hand, to do the client’s bidding, on the other to be objective. As the French would say, good idea in practice, but will it work in theory? No – the client is more important. I regret having to say this but, in my experience, most chartered surveyors I’ve encountered on referral fail the test of integrity: their opinion would not be the same if acting for the other party.
It is costing landlords a fortune having to go to a third party to get the message across. It is also costing tenants to defend. The contest ruins the landlord and tenant relationship and tarnishes chartered surveyors, whose virtual monopoly for professional work makes them sitting ducks for criticism.
This war is wrong on so many levels. It’s obvious that most surveyors don’t care. Why should they? It’s not their property, not their risk, not their money. Except it is their problem – because the more landlords that are aggrieved, the more tenants that cannot get what they want, the more likely they will never instruct an external surveyor again.
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