Heads of Terms Checklist (2026): Rent Review Clauses, Renewal Options and the New Ban on Upwards-Only Rules

Landlords, tenants, occupiers and agents negotiating commercial leases in London are increasingly focusing on how rent review clauses, renewal options and Heads of Terms should be structured in light of the new regime. With the new regime on upwards-only rent reviews moving through implementation, your Heads of Terms should be explicit on rent mechanics, review wording and renewal options - not left to be “sorted in the lease”. Use this checklist as a practical guide for what to pin down early in commercial lease negotiations.

1) Name the rent structure clearly (do not leave it implied)

Write down whether the deal is: fixed rent, stepped rent, open market review, index-linked, turnover, or a hybrid. Where there is a review, specify when it happens and what triggers it.

2) If there is a review, state whether it can move down as well as up

Address “up/down” expressly rather than relying on historic boilerplate.

3) Avoid “accidental upwards-only” drafting in variable reviews

Be careful about minimum uplifts, collars and other features that may be treated as upwards-only effects once the regime is in force.

4) Renewal options and “tenancy renewal arrangements”: treat as a live issue now

If Heads of Terms include an option to renew or any structured renewal arrangement, identify what it is, when it is entered into, and check how it interacts with the new regime.

5) Align rent review mechanics with breaks, alienation and incentives

Ensure the economics still work if the tenant breaks before a review date; ensure incentives and stepped rent schedules are unambiguous; and consider whether the structure makes assignment or underletting harder later.

6) Record review assumptions at Heads of Terms stage (especially for market reviews)

If the review is open market, note the key assumptions and disregards you want reflected. Leaving this until late drafting often creates delay.

7) Build in a practical timetable for drafting and sign-off

Allow time for the clause to be reviewed properly, especially where there are funder requirements, group company structures, or redevelopment constraints.

Next reads in the series

• Upwards-Only Rent Review Ban: What Landlords and Tenants Should Check in Commercial Leases

• Rent Review Options After the Upwards-Only Ban: A Practical Comparison for London Commercial Leases

FAQs

If the rent review provisions are not in force yet, why does this matter now?

Because Heads of Terms often shape the final lease, and renewal or option drafting is a potential risk area for arrangements entered into from March 2026.

What is the safest way to avoid a rent review surprise?

Be explicit at Heads of Terms stage about the rent mechanism, whether it can move down, how renewal options work, and have the rent review clause reviewed early rather than at the end of negotiations.

Does this apply even if the lease is contracted out of the 1954 Act?

The regime is framed to apply to business tenancies broadly, so this includes contracted-out leases and the parties should not assume contracting out removes the issue.

Author Bio

An Le Tran is a Professional Support Lawyer in the Commercial Property team at Grant Saw Solicitors. She qualified as a solicitor in 2005 and has been part of Grant Saw since 2007, bringing close to two decades of experience in property law to her role. An Le focuses on driving best practice, efficiency and innovation across the team's work, supporting the delivery of practical, commercially grounded advice to landlords, tenants, investors and developers across London.

Commercial lease and renewal advice

Our Commercial Property team advises landlords, tenants, investors and owner-occupiers across London on new leases, lease renewals, Heads of Terms and rent review drafting.

If you are negotiating terms now, we can help you assess the practical impact on your proposed lease or renewal.

Call 020 8858 6971 or email commercial@grantsaw.co.uk to discuss your circumstances.

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Disclaimer

This article is for general information only and is not legal advice. Laws and guidance change and outcomes depend on facts. If you need advice on your situation, please contact us. Grant Saw Solicitors LLP is authorised and regulated by the Solicitors Regulation Authority.

Last updated: 6 May 2026