Rack rent Definition

GLOSSARY

What does Rack rent mean?

The full value of the annual market rent of a property.

A rack rent is the rent that would be obtained for a property on the open market. It can be used to calculate mesne profits, for rent reviews and for other purposes where the value of use of land for a limited period is relevant.

View the related checklists about Rack rent

Assignment of a rack rent lease (assignee)—checklist

Assignment of a rack rent lease (assignee)—checklist This Checklist is primarily for use on the assignment of a commercial lease. It is not exhaustive and will not cover every eventuality for every transaction. You must always consider whether there are any other issues that need to be addressed. It assumes that: • the lease is a lease of commercial property let at an open market rent to an occupational tenant under terms where the landlord insures the property • the assignor occupied the property for the purposes of their business and the assignee also intends to occupy the property for the purposes of their business • the lease is a head lease and the property is not subject to any underleases • the lease is not subject to a fixed charge (in practice this would be unusual), and • no premium is payable If the assignment is part of a larger or more complex transaction, further relevant content may be found in Acquisition of commercial property (buyer)—checklist and Practice Note:...

Assignment of a rack rent lease (assignor)—checklist

Assignment of a rack rent lease (assignor)—checklist This Checklist is primarily for use on the assignment of a commercial lease. It is not exhaustive and will not cover every eventuality for every transaction. You must always consider whether there are any other issues that need to be addressed. It assumes that: • the lease is a lease of commercial property let at an open market rent to an occupational tenant under terms where the landlord insures the property • the assignor occupied the property for the purposes of their business and the assignee also intends to occupy the property for the purposes of their business • the lease is a head lease and the property is not subject to any underleases • the lease is not subject to a fixed charge (in practice this would be unusual), and • no premium is payable If the assignment is part of a larger or more complex transaction, further relevant content may be found in Sale of commercial property (seller)—checklist and Practice Note:...

Headlease rent linked to underlease rents

Linking headlease rent to underlease rentsThe rent payable under a headlease can be linked directly to the rent paid or payable under actual or potential underleases out of that headlease. In this scenario, the headlease rent may be interchangeably described as a ‘geared rent’, ‘shared rent’, side-by-side rent’ or ‘indexed rent’, and a lease in which such a rent appears is sometimes referred to as an ‘equity-sharing lease’. Typically, the headlease establishes a base rent with an additional rent then being calculated and payable as a defined percentage of the tenant’s ‘gross revenue’ (as defined in the headlease) from underlettings: see Calculating the tenant’s ‘gross revenue’ below.This type of arrangement:•is only really appropriate where underlettings are envisaged at the time when the headlease is granted — as a result, it is ideally suited to the scenario where a freeholder grants a long headlease interest (typically in excess of 125 years) to a developer who will carry out the development and then underlet it, usually in parts, to individual occupiers•tends to...

Listed buildings enforcement and criminal liability regime in Wales

Listed buildings enforcement and criminal liability regime in Wales Until 4 November 2024, the planning law on listed buildings in Wales was set out in the Planning (Listed Buildings and Conservation Areas) Act 1990 (P(LBCA)A 1990). The Historic Environment (Wales) Act 2023 (HE(W)A 2023) consolidated and replaced legislation in relation to the historic environment in Wales, including listed buildings. HE(W)A 2023 received Royal Assent on 14 June 2023. HE(W)A 2023, Pts 3 and 5 set out the statutory requirements relating to listed buildings in Wales. Some provisions relating to regulation-making came into force from 9 September 2024 and most of the rest of HE(W)A 2023 came into force from 4 November 2024. For information on the listed buildings enforcement and criminal liability regime in England, see Practice Note: Listed buildings enforcement and criminal liability regime in England. Note that the case law in this Practice Note relates to P(LBCA)A 1990 as it currently applies in Wales. Whether it remains relevant to the interpretation of the replacement provisions under HE(W)A 2023...

Discover our 41 Practice Notes on Rack rent

Report on title—long form

Report on title—long form Property: [insert name and/or address of the Property] (‘Property’) Purchaser: [insert name, address and (if applicable) company registration number of buyer] Transaction: [insert brief details] 1 Executive summary 1.1 Scope of report This report is addressed to you [insert buyer’s name] and has been prepared for your sole benefit in connection with your proposed acquisition of the Property. This report may not be disclosed to or relied upon by any other party without our prior written consent. 1.2 [ Good and marketable title We are of the opinion that, subject to the matters referred to in this report, upon completion of the purchase of the Property, payment of [ stamp duty land tax OR land transaction tax] and registration at HM Land Registry, you will obtain a good and marketable title to the Property.] 1.3 Areas of concern [Insert any concerns about the Property arising from your due diligence]. [Title indemnity insurance [has been OR will be] obtained in respect of [insert...

Duty of care agreement providing for the agents appointed to manage commercial property on behalf of the borrower to have a duty of care to the funder

Duty of care agreement providing for the agents appointed to manage commercial property on behalf of the borrower to have a duty of care to the funder date [date] Parties 1 [name of Managing Agent] [of OR incorporated in England and Wales with company registration number [number] whose registered office is at] [address] (Managing Agent) 2 [name of funder] [of OR incorporated in England and Wales with company registration number [number] whose registered office is at] [address] (Funder) 3 [name of borrower] [of OR incorporated in England and Wales with company registration number [number] whose registered office is at] [address] (Borrower) Background 1 The Managing Agent has been appointed by the Borrower in connection with the management of the Property under the Principal Management Agreement. 2 A facility has been made available to the Borrower pursuant to the Facility Agreement. 3 The Managing Agent has agreed to enter into this Agreement. 1 Definitions In this Agreement the following definitions apply: Act of...

Dive into our 5 Precedents related to Rack rent

When can a tenant be liable for contaminated land?

When can a tenant be liable for contaminated land? STOP PRESS: The Environmental Permitting (England and Wales) Regulations 2016, SI 2016/1154 come into force on 1 January 2017. The regulations consolidate all of the amendments to the Environmental Permitting (England and Wales) Regulations 2010, SI 2010/675 rather than making any substantive policy changes. We will be updating our content to reflect these changes as soon as possible. Contaminated land regime The contaminated land regime contained in the Environmental Protection Act 1990, Part IIA ( EPA 1990, Pt IIA) places a statutory duty on local authorities to identify 'contaminated land' in their area and to secure remediation. If a site is investigated or designated as contaminated land, the local authority will look first for any Class A 'causers' or 'knowing permitters'. If no Class A persons can be found, the current Class B owner or occupier may be liable. See Practice Note: Contaminated land—who may be liable? Tenant legally excluded as Class B occupier paying a rack rent...

Who must apply for an HMO licence pursuant to Part 2 of the Housing Act 1985? Who is eligible to hold a licence?

Who must apply for an HMO licence pursuant to Part 2 of the Housing Act 1985? Who is eligible to hold a licence? Section 63 of the Housing Act 2004 (HA 2004) provides the procedure that is to be followed when applying for a House in Multiple Occuption (HMO) licence. Regulation 7 of the Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (England) Regulations 2006, SI 2006/373 provides more specific details on the application procedure to be followed alongside Schedule 2 which address who should be notified of any application including the following: • any owner of the property to which the application relates (if not the applicant) • the proposed licence holder (if not the applicant) • the proposed managing agent (if any) (if not the applicant) from which it is inferred that those are the anticipated categories of applicant for an HMO. According to HA 2004, s 64(2), the authority may grant an HMO licence to the applicant, or another person if both...

See the 17 Q&As about Rack rent

Restructuring & Insolvency weekly highlights—5 December 2024

This week's edition of Restructuring & Insolvency weekly highlights includes: the need for expert evidence in Part 26A restructuring plans to comply with CPR 35 (Re Chaptre Finance Plc), an analysis of applications to set aside default judgment in insolvency proceedings (Scenic International Group Ltd (in provisional liquidation) v Adenaike), an analysis of successful fraudulent trading and other claims (London Capital & Finance v Thomson), plus a round-up of other news and cases for restructuring and insolvency professionals.

Property weekly highlights—5 December 2024

This week's edition of Property weekly highlights includes: guidance on high street rental auctions, a consultation on permitted insurance fees for landlords and freeholders, a remediation acceleration plan for unsafe cladding, a consultation on the EPC regime and cases on tenant fees, restrictive covenants and the calculation of mesne profits following an unlawful eviction in the context of insolvency.

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