Five questions every Cheshire landlord should be asking before granting a new commercial lease in 2026

If you own commercial property in Cheshire and the wider North West, 2026 is the most consequential year for the commercial lease market I have seen in nearly a decade of practice.

Five things have moved since January. Two of them are now law. One is statutory guidance that has just been published. The other two are in motion and will affect lease drafting before the year is out.

If you are negotiating a new lease, a renewal, or a regear in the coming weeks, each of these should be on the conversation list with your solicitor before terms are agreed.

Here is how I am running through them with landlord clients across Cheshire and the North West right now.

Key points

The five challenges that you need to be aware of when drafting a commercial lease

1. Will your rent review clause survive the upward-only rent review ban?

This is the headline change. It became law on 29 April 2026, when the English Devolution and Community Empowerment Act 2026 received Royal Assent. The Act includes a ban on upward-only rent review (UORR) clauses in commercial leases in England and Wales.

The substantive provisions are not yet in force. Government has signalled commencement in 2027, brought in by secondary legislation. So if you are signing a lease today with a traditional open-market upward-only review, it remains technically permissible.

But two things matter immediately.

First, the partial retrospective effect. The Act catches not only future leases but also leases granted pursuant to a “tenancy renewal arrangement” entered into on or after 17 March 2026. That phrase is drafted widely. It captures put options, call options, and any arrangement under which an existing tenant is required (or permitted) to take a further lease – whether embedded in the current lease or sitting in a separate side letter or agreement.

If you have granted, or are about to grant, a lease containing a renewal option on or after 17 March 2026, the rent on the renewed lease, and any reviews within that renewed lease, must function on both an upward and a downward basis. Even though the ban is not yet in force.

Second, the modelling shift. Investment appraisals that have always assumed a rental floor at review can no longer rely on that floor for any lease being granted today that contains a renewal option. Valuations, lending assumptions, and underwriting all need to be revisited.

What I am telling Cheshire landlords this month:

• If you have a renewal option dated on or after 17 March 2026, the rent review mechanism in the renewed lease needs to function in a downward direction. Re-draft now, while the negotiation is fresh rather than when the option is exercised three years from now.
• Where new leases are being granted, consider stepped rents or fixed uplifts. These are not affected by the ban. They give you income certainty without the political risk.
• Index-linked reviews (RPI / CPI) are still permissible, but cap-and-collar structures are likely to be the subject of further guidance before commencement. Don’t bake a structure into a 15-year lease that may be regulated out of existence in 2027.
• Shorter leases with break rights may end up doing the work that long upward-only mechanisms used to do. The institutional 15-year lease is not dead, but it is going to look different.

The cost of getting this wrong is asymmetric: if you grant a 10-year lease today with a renewal option dated after 17 March 2026 and don’t address the rent review structure, you have effectively given the tenant the right to a downward review on renewal without negotiating for it.

2. Have you modelled your tenant’s new business rates bill from 1 April 2026?

Most commercial leases pass business rates liability to the tenant. So in theory, this is not the landlord’s problem.

In practice, it absolutely is. If a tenant’s rates bill jumps sharply on 1 April 2026, three things follow. They may stop paying rent. They may invoke a break clause. They may simply fail. None of those scenarios are commercially neutral to a landlord.

The 1 April 2026 revaluation is now live. The headlines are these.

Rateable values have been reset. The new rateable value is based on open market rental values as at 1 April 2024. For most North West commercial properties, that is a different (and in many cases higher) number than the rateable value the current bill is based on. Industrial and logistics stock in particular has seen significant rental growth since the last valuation date.

The multiplier structure has changed. England has moved from two multipliers to five. The standard multiplier is now 48.0p and the small business multiplier is 43.2p, both reduced from the previous 55.5p and 49.9p. Two new lower multipliers apply to retail, hospitality and leisure (RHL) premises with rateable values below £500,000. A higher multiplier applies to properties with rateable values of £500,000 and above, set at 2.8p above the standard.

The net effect is uneven. A small high-street retail unit with a stable rateable value will see its bill fall. A larger out-of-town warehouse with rental growth will see its bill rise, sometimes substantially. Transitional relief will cap the rate of change for properties whose bills are increasing, but it also slows the benefit for properties whose bills are decreasing.

The landlord question is: do you know which side of the line your tenant falls on?

If you don’t, the conversation worth having before signing a new lease today is whether the rent you have agreed is sustainable in the context of the tenant’s actual all-in occupation cost. A rent that looks competitive on paper may be unaffordable once rates, service charge, and energy run on top of it.

For renewals being negotiated this quarter, I am asking landlord clients three follow-up questions:

• Has the tenant flagged their new rateable value? Most occupiers have not yet engaged with the VOA’s online service to verify the future RV is correct.
• If the tenant’s bill is rising, is there a covenant strength issue I should be raising at heads of terms?
• For RHL premises, is the tenant aware of the lower multipliers  and have you factored that into the rent negotiation?

You can check any property’s current and future rateable value at the VOA’s find-a-business-rates-valuation service on gov.uk.

3. Is the property going to be lettable in 2030?

Minimum Energy Efficiency Standards (MEES) sits quietly in the background and is all but forgotten, until it unexpectedly rears its head.

The current minimum is EPC band E. Since 1 April 2023, that applies to existing tenancies as well as new lettings. A landlord cannot lawfully continue to let a commercial property with an EPC rating of F or G unless an exemption is registered.

The next step is the issue. The government’s 2021 consultation on raising the minimum to EPC B by 2030 (with an interim step at EPC C in 2027) is still awaiting its formal response. Industry commentators expect the EPC B target to be confirmed, possibly with a slipped deadline of somewhere between 2030 and 2035. The interim EPC C milestone is less certain.

What is certain is the direction of travel. Across the commercial sector, somewhere between 60% and 87% of existing stock is below EPC B today. Of the Cheshire commercial properties I see across acquisitions and lease work, a significant proportion sit in EPC bands D or E. They are compliant now. They will not be compliant for very much longer.

The lease-drafting consequences are practical and immediate.

For landlords granting a new lease today on a property currently rated D or E: factor a planned retrofit into the lease structure. Decide who will pay for what. Decide whether the works will be done during the term, at a rent-free period, or as a tenant fit-out obligation. None of these conversations are easy at lease end. All of them are manageable at lease grant.

For longer leases (10 years plus): the lease will straddle the 2030 deadline almost regardless of when it is signed. The reinstatement and yield-up obligations need to anticipate the EPC trajectory. A tenant fitting out today to a basic specification may be installing equipment that will not survive a 2030 EPC re-assessment.

For green clauses generally: the days of the optional “green lease” are ending. Energy data sharing, sustainability provisions, and consent to landlord works for energy improvement are becoming table-stakes. If your standard form doesn’t include them, this is the year to update it.

The single highest-leverage action a Cheshire landlord can take this month is to commission a current EPC for any commercial property let or available to let that has not been re-assessed since 2022. The 2022 change in EPC calculation methodology means many properties are sitting on a rating that could now be improved without any physical works at all.

4. Does Martyn’s Law catch the property – and have you written that into the lease?

The Terrorism (Protection of Premises) Act 2025, more commonly known as Martyn’s Law, received Royal Assent on 3 April 2025. The statutory guidance under section 27 of the Act was published on 15 April 2026. Commencement is now consistently being signalled by Government as Spring 2027, likely April 2027.

For commercial landlords, the relevant question is whether the building or its use brings it within scope of the Act. The tiered structure is straightforward.

Standard tier. Premises at which it is reasonable to expect between 200 and 799 individuals may be present at the same time. The requirements centre on low-cost public protection procedures such as staff training, evacuation and lockdown procedures, communication during an incident.

Enhanced tier. Premises and qualifying events at which 800 or more individuals may be present. The requirements include all of the above, plus appropriate public protection measures to reduce vulnerability to terrorist attacks such as physical security measures, vigilance procedures, and a more developed security plan.

Penalties for non-compliance can include monetary penalties (up to £10,000 in the standard tier, materially higher in the enhanced tier) and restriction notices.

The lease question is: in a multi-let building, who is the “responsible person” and is that person the landlord, the managing agent, the tenant, or all three?

The Act answers part of this. The “responsible person” is the person who has control of the premises. In a fully let single-tenant building, that is the tenant. In a multi-let scheme with common parts, the position fragments – the landlord retains control of common parts; the tenant has control of demised premises. Both may have obligations.

Practical drafting implications for new leases being granted today on premises that could be in scope:

• Identify which party is the responsible person for which parts of the building. Don’t leave this to be argued about in 2027.
• Address cost-sharing for any physical security measures in the enhanced tier. If a tenant is installing tier-appropriate measures during the term, the lease should address what happens to those measures at yield-up.
• Address co-operation duties. Section 27 statutory guidance imposes co-operation obligations where the responsible person for the premises is not the same as the controller of common parts.
• Build in landlord rights of entry for security inspections. Many standard forms don’t have a sufficiently broad consent for what may end up being routine inspections.

The Cheshire and North West commercial landlord most affected by Martyn’s Law in 2026 is the owner of a multi-let building with retail or leisure occupiers, where the tenant’s business model regularly attracts public footfall above the 200-person threshold. Restaurants, gyms, event spaces, retail with substantial customer volume, and any building with combined retail uses pushing aggregate capacity over the standard tier threshold all need to be looked at.

5. Have you considered how the BPR and APR changes affect the way you hold the property?

The fifth item is the one most landlords haven’t fully connected to their lease portfolio: the changes to Business Property Relief and Agricultural Property Relief that take effect on 6 April 2026.

In brief, the combined BPR and APR allowance is now £1m per person (giving full 100% relief), with 50% relief on qualifying assets above that threshold. For landlords holding commercial property as part of a trading business that qualifies for BPR, the relief regime has materially changed.

This is not a lease-drafting issue at first glance. But the way you hold the property – sole name, joint names, company, LLP, partnership, trust – interacts with the BPR / APR regime in ways that can mean a structure that worked well in 2024 is materially less efficient in 2026.

Three things I am flagging to landlord clients this quarter.

Ownership review. If your commercial portfolio is held in a single name and the value materially exceeds £1m per person, the inheritance tax position has shifted. Joint ownership, family investment companies, or trust structures may produce a different outcome under the new regime. This is an estates and tax planning conversation rather than a leasing one, but it is best had in the same window as a lease portfolio review.

Trading vs investment. BPR has always required the underlying business to be more than half “trading” rather than “wholly or mainly” investment. The relief is not available for a pure property letting business. If your business sits in the grey area (for example, a property business that includes substantive serviced offices, holiday lets, or other trading-flavoured activity) the line between trading and investment is more important under the new regime than it was before.

Partnership and LLP structures. Where commercial property is held through a partnership or LLP, the partnership return and the underlying ownership terms need to be reviewed against the new allowance. Some structures that previously delivered seamless 100% BPR will now deliver 100% up to £1m and 50% above. The cash impact on a beneficiary is significant.

This is not strictly a commercial property question. It is a landowner question. But the two are inseparable when the property is the main asset.

If you have not had a structural review of how you hold your commercial portfolio since the BPR / APR changes were announced, the next quarter is the right window for that conversation alongside any lease work the new political and regulatory environment is throwing up.

Pulling it together

The five questions are different in character. Rent review is about lease drafting. Business rates is about tenant covenant strength and rent affordability. MEES is about capex planning. Martyn’s Law is about responsibilities and cost allocation. BPR / APR is about ownership structure.

The common thread is timing.