REALWorld Law

Commercial leases

Changes in rent

If the rent is to be changed or increased how will the new rent be determined?



The rent payable following a review will normally be the current market rent for the premises at the date of the review or the same rent as the immediately previous period, whichever is higher. The lease may provide a mechanism, such as a procedure for appraisal by an independent expert, for determination of the new rental rate and may also specify whether the expert is required to make certain assumptions about the use and location of the premises and its improvements. If the determination of the expert is not explicitly binding on the parties, the lease may also provide for an arbitration procedure under the applicable Provincial arbitration statute.