Commercial valuation dispute

alams

Hi all,

Need some advice. I own a restaurant which has been rented out for the past 6 years, 7th year running. Rent for first 3 years was 9k, increased to 12k after 3 years. Rent review was due in Jun last year. My valuation is 17k as per surveyor, tenant counter surveyed with an apparently no increase stating that he is already paying too much!!!!

I want to be paid what I think im entitled to!! yesterday, the tenant surveyor wrote to my surveyor with a proposal of 13k (1k increase, dont forget he's already stated that my tenant is paying too much and rent should only be around 8k) but now he's trying to compromise at 13k and has given a deadline of 26th June to accept.

What should I do???

Im not happy with that amount and ideally I want the 17 k as per my surveyor valuation!! I sense other surveyor is using good tactics to get a low increase for his client-he valued the rent payable at 8k!!!! and now is stating that they will accept 13k as current rent is 12k!!

My Surveyor has now stated to put in an offer of 16k and maybe we should then be able to agree to around 14k???????????????? He has been arguing before with the other party that rent value is 17k!!!!!

Please Help

I am new to all this and I know my tenant has the upper hand as he has more contacts than myself

Bibliophile_2

It sounds like you're in a difficult situation. Times are tricky for businesses and they're not making as much money as they used to, so they're looking to reduce their costs anyway they can.

From an outsiders perspective it seems odd that the rental value has gone up so much. I would have through commercial rents were on a downward track, the same as residential. You might want to have this checked out.

Other than that, it's down to what you can accept, and whether you can walk away from the deal.

Good luck

chickmug

This is happening every day all over the country with leaseholds.

Every landlord wants to get as much as they can and will try it on. So you need to spend money with your surveyor negotiating the best deal for you. If the place has a high demand the LL has the upper hand. If you feel there is low demand the tenant has the upper hand.

But the surveyor you use is the man and should be one that IS experienced in this sort of neogtiation. It can and does drag on, does cause tenants/LL's stress, and in many cases can result in a increase in rent so is a case of reaching/agreeing the best figure possible. However you will end up with a big professionals bill for their service.

So often the usual scenario is - LL wants far more than is realistic - naive tenants agree immediately - better informed tenants dispute (may get their own surveyor in) - loads of time passes and agreement is reached. Good outcome usually for the two surveryors who have earned well?

You say your valuation but what is that based on?

ss70

commercial property is dead.

loads of empty places with to let signs clutter every city in the UK.

and you are moaning about your tenant only letting you increase the rent by £1000.00!:rotfl:

hoggums

Yes alams - you only need to look down any high street at the number of empty shops to show what dodgy ground you are walking over here. You could end up losing the tenancy completely and then face a large void period - or force your tenant into liquidation with high rent charges.

Stop being greedy. Take the money you are offered and then increase the rental when the eceonomic recovery is in progress.

alams

My valuation provided by the surveyor is based on comparisons within the local area. The surveyor has stated that he may have been optimistic with this figure as he based it on comparisons prior to the credit crunch. The rent started off very low as it was never valued at the start, the rent was just verbally agreed, but now im trying to bring it upto market value!!

alams

Okay just to clear things up. My tenant has recently leased another commercial property and im aware that he is paying a high rent.

Now I aint being jealous but my property rent started off low and I dont see why i should lose out on what im entitled to (if anything) whilst he is enjoying his bsiness life!!

ss70

alams wrote: »

My valuation provided by the surveyor is based on comparisons within the local area. The surveyor has stated that he may have been optimistic with this figure as he based it on comparisons prior to the credit crunch. The rent started off very low as it was never valued at the start, the rent was just verbally agreed, but now im trying to bring it upto market value!!

Exactly, this is NOW post credit crunch, where the UK has loads of empty commercial units.

Landlords are paying rates and interest on empty units they cannot let and are very flexible on the terms they will let for to compete with all the other landlords with empty units.

Go ahead try and get as much as you can, your tenant will move, and their new landlord will appreciate your tenant more than you do.

ciano125

You have to look at what a court would decide. What does the evidence say? If it all points to £17k, then that's what the courts will decide. If the evidence was all pre credit crunch, and there is no evidence post credit crunch, then the evidence that there is has to be used. If you agree to his and there is no evidence to back it up, you create new evidence.

It sounds like they have served a Calderbank offer (google it). It's all part of the fun of Landlord and Tenant negotiations.

lincroft1710

I don't what your town centre is like but mine is full of restaurants/takeaways/coffee shops plus a shedload of empty shops.

Questions to ask yourself:

Is the restaurant in best area for this type of business?

Can my tenant find other suitable premises for less rent, perhaps better area or smaller/larger whichever he'd prefer?.

Can my tenant afford proposed rent increase?

Could I easily find another tenant if negotiations break down?

How low a rent can I honestly be prepared to accept?

I personally think your surveyor is overvaluing, I wouldn't insult him by saying he's living in cloud cuckoo land, but at moment it seems to be a tenant's market rather than a landlord's.

Poppy9

alams wrote: »

Okay just to clear things up. My tenant has recently leased another commercial property and im aware that he is paying a high rent.

Now I aint being jealous but my property rent started off low and I dont see why i should lose out on what im entitled to (if anything) whilst he is enjoying his bsiness life!!

The other property that he is leasing, is it being used for the same purpose as your property?

How do you know how much rent he is paying for his new property?