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RETAIL LEASES ACT 1994 - SECT 18

Restrictions on adjustment of base rent

18 Restrictions on adjustment of base rent

(1) In this section-

"base rent" means rent, or that component of rent, which comprises a specified amount of money (whether or not there is provision for the amount to change).
Note-: Turnover rent (rent determined by reference to the lessee’s turnover) is not base rent because turnover rent is not a specified amount of money (it varies according to the lessee’s turnover).
(2) A retail shop lease must not provide for a change to base rent less than 12 months after the lease is entered into and must not provide for a change to that rent less than 12 months after any previous change to that rent. This subsection does not apply to a change to base rent by a specified amount or specified percentage.
Note-: For example, subsection (2) prevents a lease providing for an increase to current market rent more than once in 12 months. It does not prevent a lease providing for the rent to increase by $100 every 6 months. Nor does it prevent a lease providing for the rent to be increased to current market rent after 12 months and then to be increased by 2% every 6 months after that.
(3) A provision of a retail shop lease is void to the extent that it-
(a) reserves or has the effect of reserving to one party a discretion as to which of 2 or more methods of calculating a change to base rent is to apply on a particular occasion of a change to that rent, or
(b) provides for a method of calculating a change to the base rent but reserves or has the effect of reserving to one party a discretion as to whether or not the base rent is to be changed in accordance with that method on a particular occasion, or
(c) provides for base rent to change on a particular occasion in accordance with whichever of 2 or more methods of calculating the change would result in the higher or highest rent.
(4) If a retail shop lease provides for a change to base rent in a way that has the potential to cause that rent to decrease (such as a provision for the rent to change to current market rent), a provision of the lease is void to the extent that it-
(a) prevents or enables the lessor or any other person to prevent base rent decreasing pursuant to the change, or
(b) limits or specifies, or allows the limitation or specification of, the amount by which the base rent is to decrease.



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