Time is of the essence: Difference between revisions

Time is of the essence (view source)

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 === Time being not of the essence and rent review ===
-We rarely foray into commercial leases, folks, but you may see written the rent review section of a commercial lease that time is not of the essence. These contracts written to protect the landlord, as they inevitably are, you may puzzle at this. This is to give the landlord the excuse to retrospectively increase rent if it neglects to at the earliest opportunity. It permits the landlord to backdate the increase, on the argument that, “well, time wasn’t of  the essence, so I didn’t bother to set the new rent at the time, and am doing it now.” Commercial tenants are warned to be proactive about re-setting rentals, therefore, to deprive the landlord of such optionality.
+We rarely foray into commercial leases, folks, but you may see written the rent review section of a commercial lease that “time is ''not'' of the essence”.
-This strikes the JC as crappy behaviour, all the same. If you don’t reset the rent at the time — or at least try to — then the rent delta for that missing period it ought to be your loss, and indeed would be on ordinary principles of waiver. Your increase would take effect prospectively.
+What? ''Not'' of the essence?
+As these contracts are inevitably written to protect the landlord, you may puzzle at this. Is this just unusual generosity by the landed gentry?
+Quite the contrary. This is to give the landlord the excuse to retrospectively increase rent if it neglects to at the earliest opportunity. It permits the landlord to backdate the increase, on the argument that, “well, time wasn’t of  the essence, so I didn’t bother to set the new rent at the time, and am doing it now.” Commercial tenants are warned to be proactive about re-setting rentals, therefore, to deprive the landlord of such optionality.
+This may strike you as crappy behaviour — it did me, at first blush: if you don’t reset the rent at the time — or at least ''try'' to — then the rent delta for that missing period it ought to be your loss, and indeed would be on ordinary principles of waiver. Your increase would take effect prospectively.
+But the rent review process in a commercial lease is negotiated between arms’ length parties who are not regarded, as are domestic tenants, as needing the protection of fair treatment. And it is meant to be an agreed, or failing agreement, independently determined market rent. This is not a free option for landlords, but a “marking to market”.
 {{sa}}