Work carried out by the landlord

Practical application:

Under the 2008 ruling, the landlord must prove the works directly benefited the tenant's business activity—such as increased customer traffic or higher sales—to remove the rent cap. Without concrete evidence like before-and-after revenue comparisons or footfall data, the cap will apply, limiting the increase. Gather sales reports from the tenant or commission a market impact study before initiating renewal proceedings.

Practical application:

The case law clarifies that works must have a favourable impact on the tenant's business; merely upgrading facilities isn't enough if it doesn't boost trade. The tenant can object by demonstrating that the kitchen upgrade did not increase their turnover or customer ratings—for instance, by showing consistent revenue figures pre- and post-renovation. Submit a formal challenge with financial records to the lease renewal commission or court to enforce the cap.

Practical application:

Before buying, the investor must investigate whether these works truly enhanced the tenant’s business operations—e.g., did they enable higher client visits or employee productivity? If not, the rent increase will remain capped, reducing projected returns. Request the tenant’s business performance data from the seller, or obtain an expert assessment of the works’ impact, to negotiate the purchase price accordingly.