The most important development for landlords and tenants in 2004 was the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003, which came into effect in June. This amendment to the Landlord and Tenant Act of 1954 - the most significant legislative change to the relationship between the two parties - seeks to be more tenant-friendly by modernising and simplifying procedures, including tenancy terminations and contracting out.

A notable benefit for tenants is that they now have the same right as landlords to apply for an interim rent while negotiations continue on a new agreement.

The debate about how rents are assessed gathered pace in 2004, particularly in sectors where there have been no, or few, new lettings or rent review evidence on which to rely. This lack of new evidence has made rent reviews based on floor area comparability more difficult to judge. As a result, there appears to be an increasing trend towards looking at profitability and affordability of individual units when considering rents.

The beer tie was once again the subject of debate as a committee of MPs investigated beer prices paid by tenanted publicans. It is now expected that a new code of conduct between landlords and tenants will be introduced to improve relations between them. This is likely to include an end to the contentious upward-only rent reviews clauses.

Last year saw increasing pressure from the Government on landlords to abandon the traditional upward-only rent review clauses in tenancy agreements, which it alleges damage British businesses' competitiveness in a global market. Research published in April showed that, despite pressure for voluntary action on the issue, more than 98% of leases still contain upward-only rent review clauses.

Recent Government statements suggest that measures to ban these clauses are increasingly likely, a move many commercial tenants would welcome, but one that may undermine confidence in the property investment market.

Finally, the introduction of the new Licensing Act will see licensees submit their licensing applications to their new masters, the local authorities, for the first time this month. This may lead to a backlog as everyone gets used to the new procedures, and a further increase in bureaucracy.

information from property agent Christie & Co
www.christiegroup.com