Given that most modern commercial leases provide for rent reviews that coincide with a quarter day,

Will Densham

It is no surprise that there have been several queries relating to the impact of the EU referendum result on rent reviews with review dates of 24 June 2016. The main question asked is when the actual letting takes place. Easy you might think - on the rent review date. But that is not specific enough, because values may have changed on a minute-by-minute basis.

If we assume a notional letting took place at one minute past midnight, the City, bookmakers and potentially the property market were in a reasonably comfortable space thinking that the country would vote for the UK to remain part of the EU.

However, if we were to assume a letting at, say, midday, by then the vote was known, which tenants would claim influenced incentive packages and even headline rents. A landlord wanting to get the deal done but faced with the possibility of an extended rental void would arguably offer a few more months rent free.

So what should we assume in terms of the timing of the transaction? While the starting point is always to look at the particular lease to see if there is any guidance, this is unlikely to help - the lease will just stipulate a date and not the actual time of the transaction.


It is worth bearing in mind that evidence of comparable transactions that take place after a rent review date are still admissible to show a trend, but evidence of events after the review date is inadmissible. So if the letting is at one minute past midnight, one can say that the Brexit result was not known and the letting would not have been influenced by it. The opposite can be said if the letting was at lunchtime.

What may be argued is that lettings rarely ever complete at one minute past midnight, unless there are particularly demanding clients or macho lawyers involved or unless some other specific reasons come into play. It is obviously far more common for lettings to complete when the banks are open and funds can be transferred - in other words, after the outcome of the vote.

While it remains to be seen how arguments will play out, it is likely to create reasons for disparities in views, which may see cases drag on for longer. This is certainly what happened after Lehman Brothers’ insolvency in September 2008.

Will Densham is a partner and head of the real estate litigation and construction teams in the south at Eversheds