Rent Increases

Merlin · Post by **Merlin** » Mon 04 Apr, 2005 8:07 pm

Had an interesting chat with a moulding rep who came in today.

Three of his usual shops (in Cornwall) have closed this year, due to a huge increase in rent at Lease renewal time. mmmmm He quoted an increase of between £3000 to £5000. That is worrying, especially as my Lease is due for renewal at the end of May. My Landlords - 3 in number - are 2 Estate Agents and 1 solicitor. Which lesserns my chance of a successful outcome if my rent is increased in the order of the above.

In fact my competitor in town, closed down his retail gallery only last Thursday. He is continuing with framing though in a unit, way off the main street. His rent increased by £2000.

I would like to think that I could pick up his picture sales, but they were all local artists who ask 'silly money' for their pictures. In fact one has already been in asking for wall space. Yet he only sold one original in the last 12 months. Yea he was that good . NOT

Hopefully, my landlords will see sense ??? especially as there are already 5 empty premises in town and they have been for over 12 months.

Yes, I have already checked these premises out. Good sizes and positions, but they come with second and third floors. That is not what I want.

Here's hoping

JFeig · Post by **JFeig** » Mon 04 Apr, 2005 9:23 pm

Merlin,

What is that as a % increase? It that per year?

markw · Post by **markw** » Tue 05 Apr, 2005 8:35 am

Merlin
my lease went up by similar amount a few years ago - and it will probably go up again soon, The problem is that landlords of smaller shops havn't kept up with property values and like it or not they should be following value of property as a guide to lease value. The bad news is that the local council will also put up your rates. The one argument that you can use effectivly is empty shops - this indicates that the demand isnt there - your leaving may well give them a problem as empty shops cost landlords money - better to have a good tenant on poor rates than no tenant at all. In my case we have no empty shops and lanlords know that they can fill my shop easily, i rely upon the common sense of a good landlord and make sure that my turnover is high and profit margin good. I take the position that i need to be trading in a succesfull business area - a back street unit wouldnt work for me, so i have to pay the price for position - its then my job to cover the cost and with any luck make enough to draw a salary.

It has dawned on me recently that if i had a larger property and let some out as office space - combined with the amount i pay as rent i could buy a property. Its worth going over the figures.

SquareFrames · Post by **SquareFrames** » Tue 05 Apr, 2005 10:51 am

Hi Folks,

Good to see that I am not the only one with a huge rent increase. My landlord approached me last October and informed me that my rent was increasing from January 2005. The increase.....50%. We just either had to like it, lump it, or close, so we basically had to like it.

We had (still have) the thought of going to another town within 10-15 mile radius of our position, but its on the back burner for the time being. We would not close our present location, just open another outlet for framing orders and picture sales, no workshop. We did look at one new premises in Belfast, £29000, a year rent, £9750.00 rates, so theres almost 40 grand before you open the door, switch on a light, connect a telephone, switch on a heater, etc...and the premises wernt even that big...750-800 square feet, so we have decided to stay put and put a slight increase on our services.

Is it legal for a landlord to increase the rent by 50% or by any amount, without justifying it? Theres one for all you legal eagles. Is it legal to spring any increase, both without prior notice and the landlord doing something major to the building, like rejuvinating the exterior?

A former Guild member had two premises, one in Lisburn, one in Belfast, the Lisburn one closed down due to massive rent and rate hikes, he has since closed his Belfats operation as well. Lisburn, Belfast, 2 of the most expensive places to rent in Northern Ireland, if not the UK.

I must admit, one thing that has come from peace in Northern Ireland, is unscrupulous property developers, cashing in on the relevant peace and prosperity, any wonder Northern Ireland has such a high cost of living?

Steven

sarah · Post by **sarah** » Tue 05 Apr, 2005 2:57 pm

Crazy the money a business has to pay out just to unlock a door never mind employ staff, buy stock, or use a telephone.

Flip we should all go on strike - no sorry we'll leave that for the poor civil servants who recieve a measely salary, childcare, flexi time, weekends off etc etc - poor sods they have it hard!

As for the legal standing of the rent increase - fraid it is perfectly legal but the landlord has to follow guidelines, these however aren't really set in stone. You should have been given a written notice of the increase even if the landlord contacted you in person in addition you should be given at least one months notice. I guess it's all just business - we have the right to put up our prices so I suppose we have to expect it from our landlords.

SquareFrames · Post by **SquareFrames** » Wed 06 Apr, 2005 7:39 am

Hi Sarah,

I heard yesterday from another landlord type person in the town, that no landlord can justify a huge rent increase without at first making changes for the betterment of the building or my lease.....I await to see what my landlord does...

Then I opened Monday's unimportant post and I had got a letter from the planning office on Monday stating that my landlord had applied to pull down another empty premises in the town and completely rebuild to relet.......now I know why the increase came about.....Strange isnt it...we got to pay for his friggin' renovations....My wife is fuming, and intends going to see him this morning, to see if he will at least pay for some rewiring on our third floor stairs. The light on the stairs to the 3rd floor actually works from the light switch that works the window lghts, and then only when it wants to. I had solved the probelm by installing a 4 foot strip light, but why should I have done, its his job for the major upkeep of the building...isnt it?

Steven

markw · Post by **markw** » Wed 06 Apr, 2005 8:37 am

Rent increases etc depend upon your lease agreement - normally they specify increases based upon fixed percentage at an agreed time - yearly - every 5 years etc. if you are coming to the end of the lease then you have to renegotiate. sad fact is that the tenant always ends up paying - even when you win you almost inevetibly end up paying a solicitor to negotiate on your behalf. The one thing I wouldnt do is have a go at the landlord - my attitude is that its better to have me as an easy going reliable tenant than someone else - so be nice to your landlord - makes it easier to negotiate.
Is there a demand for property in your area? if so then most landlords are going to try and get the maximum rate. If not then who is going to fill your place if you up sticks and leave. put yourself in your lanlords position and ask, is he wise to muck you around?

FATG offer legal advice dont they?

Merlin · Post by **Merlin** » Wed 06 Apr, 2005 6:06 pm

Some interesting comments. My lease states a rent review every 3 years. Upwards only in line with the National Average. Trying to find that national average is very difficult. Even my surveyor states that the average is the LOCAL current rate.

Whether this helps or not here are my figures: They are available on the public domain anyway.

High Street Location, Single Floor of 3 storey building owned by 3 landlords.
Lease terms, 6 years with full maintenance and repair by tenants.

Shop size 42 sq m which includes two full height bay windows.
Workshop sizes, 12 sq m which includes toilet and sloping area for stairway to upstairs offices.

So you see the shop is not actually that big.

Current rent £9000 pa = £750 per month.
Current rates £4920 pa = £410 per month. An increase of £50 per month over last year.

Local Average Wage = the lowest in England.
Average Domestic Rates = the highest in Europe.

Initial probing says that the rent is going to increase to £12000 pa = 33%

In the main street there are 5 empty shop premises and they have been empty for no less than 15 months. 1 has been empty for 10 years !!

Last year, one competitor (not on main street), gallery and framer, closed completely and relocated 'up country'

Last week, the other competitor closed his gallery and shop, but relocated his framing outlet to a unit off the main street with access through a 'not highly visible' side entrance.

I take in all that has been said and will try and negotiate with the above facts. I just hope that I can pick up the trade from these two other businesses as I need to find the extra £300. Damn!! that is my CMC on the back burner now.

Will keep you all posted.

SquareFrames · Post by **SquareFrames** » Thu 07 Apr, 2005 7:45 am

Hi,

Our landlord is quite approachable, and by doing so will not cause any bother. Not the fact that a rent increase was thrown upon us, but now the facts have arisen why? His new venture. My wife heard yesterday that the hairdressers closest to us, their rent increased a hell of a lot more than ours...so maybe we got off lightly. My wife went to see him yesterday, but alas he wasnt there, he will be today.........watch this space for developments.

In this town...there are at least 50% of the shops closed...delapidated, falling down all in need of major redevelopment. We have a huge amount of money from some Heritage committeee, which is run by Englishmen and women, (Outsiders) who basically have no idea what we the towm folk want or need, and they do make a habit of not listening, well not so much a habit...they got it down to an art form. I believe the money has now been taken off the committee and the development committee because the Heath and Safety Exec. said that 2 buildings were not safe and had to be pulled down, so they duely were, and they fought so hard to have them renovated intead of rebuilt. Somebody, somewhere has duely took the hump and withdrew the money from the town's redevelopemnt committee, that has been lying in a bank accout making huge interest for the past 3 or 4 years. So we carry on with empty shops, making the town look derilict.

What has annoyed everyone is.....12 years ago a certain businessman got a 100% grant to renovate 3 shops in the town, which he did. Once the renovations were complete, he put new shutters up and thats the last time anyone has seen inside. he never leased them, sold them or infact put windows in them...what happened to him....sod all! And I mentioned to a fellow trader the other day I was for painting the outside of my shop during the summer,I was told I had to ask permission from the Heritage committee to get the colour passed.....aye right! It wil be done Royal Maroon as normal.

The Guild do offer a 24 hour legal helpline, and a damn good helpline too. I had the unfortunate occasion to have to use it a few years ago..at 11pm for a personal affair. They rang me straight back and I got my ex wife sorted...even at that ungodly hour......made that years membership fee well worth it.

Steven