Welcome to the second edition of our newsletter.

This month, we focus on the fundamental shifts currently reshaping both the commercial and residential sectors - from the transformative impact of the English Devolution and Community Empowerment Act 2026 to the urgent 31 May compliance deadline for the Renters’ Rights Act. We also examine why a robust Schedule of Condition remains a vital technical tool for mitigating long-term liability.

As we will be walking the aisles at Jtrade tomorrow, we would welcome the opportunity to discuss these updates in person. Please do look out for the team or get in touch to arrange a brief catch-up.

The End of Upwards-Only Rent Reviews

Following the Royal Assent of the English Devolution and Community Empowerment Act 2026 on April 29, the long-standing "upwards-only" rent review is officially on its way out.

For decades, these clauses have provided landlords with a "ratchet" effect, ensuring rents could only rise or stay static, regardless of market downturns. The new legislation marks the most significant intervention in commercial leasing since the 1954 Act.

• The Mandate: New commercial leases will soon be required to feature "up-or-down" market reviews. If the open market rental value has dropped at the time of review, the rent must be capable of falling to meet it.
• The Timeline: While the ban is expected to fully commence in 2027, a critical "anti-forestalling" rule applies to any renewal arrangements or agreements for lease entered into on or after March 17, 2026.
• Existing Leases: For now, the legislation is not retrospective. Existing leases with upwards-only clauses remain valid and enforceable until they expire or are renewed.

At Survo Chartered Surveyors, we are already adapting our valuation and negotiation strategies to account for this shift in risk:

• For Landlords: We are seeing a move toward index-linked reviews (RPI/CPI) or stepped rents to maintain income certainty. There is also a renewed interest in turnover-base models to align landlord and tenant success.
• For Tenants:This represents a major win for long-term liability management. However, tenants should be prepared for landlords to seek higher "day-one" rents or shorter rent-free periods to compensate for the loss of the upwards-only protection.

Whether you are currently negotiating a new headlease or approaching a mid-term review, the "standard" wording is no longer standard. We are here to ensure your lease structures are not only compliant with the 2026 Act but also commercially resilient.

The Smart Tenant’s First Move: A Schedule of Condition

Before entering into a commercial lease, tenants should carefully consider their repairing obligations. One of the most effective ways to manage future risk is to prepare a Pre-Lease Schedule of Condition before the lease is completed.

A Schedule of Condition provides:

• Clear record of the property’s condition at lease commencement
• Written commentary on defects, wear and deterioration with supporting photographic evidence
• An objective benchmark for future comparison
• Reference point at lease expiry

Why it matters:Commercial leases often include full repairing and insuring obligations, which can create significant liability for tenants. Without a properly prepared Schedule of Condition, a tenant may be required to maintain the premises, repair existing defects, or even return the property in a better condition than it was at the start of the lease.

Where the Schedule is correctly referenced in the lease, it can help limit the tenant’s repairing liability to keeping the premises in no worse condition than recorded at lease commencement. This is particularly important for older buildings or premises showing existing disrepair, wear or deterioration.

Reducing dilapidations disputes:At lease expiry, disputes often arise over repair, decoration and reinstatement obligations. A Schedule of Condition helps by providing a clear evidential baseline, distinguishing pre-existing defects from tenant-caused damage, and supporting negotiations between surveyors and solicitors.

Benefits for landlords:Although often viewed as tenant protection, Schedules of Condition can also benefit landlords by creating transparency from the outset, clarifying the condition of the premises, supporting maintenance planning and helping distinguish existing defects from deterioration at a later stage.

What should a Schedule include:An effective Schedule of Condition should contain detailed written descriptions, comprehensive photographs, clear identification of defects, room-by-room formatting and logical referencing throughout. Just as importantly, the Schedule should be incorporated into the lease and expressly referred to withinthe repairing clause.

Conclusion:A Pre-Lease Schedule of Condition is a practical and commercially sensible step for both landlords and tenants. By documenting the condition from the outset, it can help reduce financial exposure, limit contractual uncertainty and provide valuable protection if dilapidations issues arise later.

Renters’ Rights Act: The May Deadline

With the Renters’ Rights Act having commenced on 1 May 2026, the landscape of residential lettings has fundamentally shifted. The abolition of Section 21 and the move to a unified system of periodic tenancies are now in effect, but the most pressing concern for landlords is the administrative deadline of 31 May 2026.

To ensure compliance and avoid statutory fines of up to £7,000, the following must be completed by the end of the month:

• Serve the Mandatory Information Sheet: You must provide every tenant with the official "Renters’ Rights Act Information Sheet 2026".
• Formalise Written Agreements: Any existing oral tenancies must be backed by a written record of terms provided to the tenant.
• Update Rent Review Procedures: Contractual rent review clauses are now unenforceable; all future increases must strictly follow the Section 13 procedure.

Ensuring these notices are correctly served is a mechanical necessity to safeguard your position.

Survo Chartered Surveyors 195 Bury Old Road, Prestwich, Manchester, M25 1JF 0161 792 5050

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