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User Clause

Question: I occupy a property as a newsagent, but the ‘user clause’ allows me to use it as a takeaway. During a rent review will I be charged based on takeaway, which on my parade would attract a higher rent?

The user clause in your lease is the basis of your valuation on rent review. Therefore even though you are not using the premises as a takeaway, the value can be assessed on this potentially higher value use, regardless of whether you have planning consent to be able to use the premises as such.

This is on the assumption that the ability to change use is subject to the landlord’s consent which is ‘not to be unreasonably withheld’. If this phrase is not included, you will not be charged rent on the basis of a takeaway because you do not have to assume that the landlord would be reasonable in granting consent.

In the event that the user clause allows the change of use but it is clear that you would not be able to gain planning consent to use the premises as a takeaway, there is an argument on review that a rent based on your actual use as a newsagent should apply instead.

Alternatively, if your user clause states that you can only use the shop as a newsagent, and no other use is permitted, then any higher rent applicable to a takeaway would not apply.

Therefore, when considering the appropriate value on review it is essential to consider the user clause within the lease, as it is the primary document, but it is also important to investigate the planning situation and highlight any variations between the two.

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