Rent Ratchet Clause Samples

A Rent Ratchet clause sets a minimum threshold for rent increases, ensuring that the rent payable under a lease cannot decrease at review dates, even if market conditions would otherwise justify a reduction. Typically, this clause applies during periodic rent reviews, where the new rent is compared to the previous rent, and only upward or static adjustments are permitted. The core function of a Rent Ratchet is to protect landlords from declining rental income, providing financial stability and predictability by preventing rent from falling below previously agreed levels.