Leasing & Letting

Question 1

Why might a REIT require a rent review clause tied to CPI rather than open market rent?

Answer 1

CPI-linked rent provides predictable, inflation-adjusted income and reduces exposure to market volatility.

Question 2

What are the key objectives of a lease negotiation from a landlord’s perspective?

Answer 2

Maximise rental income

Secure a strong covenant

Minimise voids

Limit repairing and service obligations

Ensure future rent growth through review clauses

Question 3

Name three common lease incentives in commercial lettings.

Answer 3

Rent-free periods

Capital contributions (e.g. for fit-out)

Stepped rents or break clauses

Question 4

What is the role of an Agreement for Lease?

Answer 4

It sets out pre-conditions before a lease is granted — often linked to completion of works or obtaining planning consent.

Question 5

When is a landlord required to comply with the Code for Leasing Business Premises (2020)?

Answer 5

While not mandatory, RICS members must advise clients on it and act in line with its principles unless instructed otherwise.

Question 6

What’s a common issue in underletting within assets?

Answer 6

Breaches of user or alienation clauses due to informal occupation by third parties