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RETAIL SHOP LEASES ACT 1994 - SECT 27
Timing and bases of rent reviews
27 Timing and bases of rent reviews
(1) If a retail shop lease provides for a review of the rent payable under the
lease during the term of the lease, or under an option to renew or extend the
lease, the lease must state the timing of the reviews and the basis on which
each review is to be made.
(2) The rent may not be reviewed more than once in
each year of the lease.
(3) Subsection (2) does not apply to the first year
of the lease.
(4) The rent may be reviewed using different bases during the
term of the lease, but each review must be made using only 1 basis.
(5) The
basis for a rent review must be a single basis consisting of 1 of the
following— (a) the current market rent of the leased shop;
(b) an
independently published index of prices, costs or wages;
(c) a fixed
percentage of the base rent;
(d) a fixed actual amount;
(e) if the rent is
determined as a base rent plus an amount equal to a percentage of the turnover
of the lessee’s business—the average rental paid over the previous year,
or the stated number of previous years, of the lease;
(f) another basis
prescribed by regulation;
(g) a single basis formed by a combination of 2 or
more bases mentioned in paragraphs (b) to (f) .
(6) If the rent is determined
as a base rent plus an amount equal to a percentage of the turnover of the
lessee’s business the review of the base rent must be made in accordance
with subsections (4) and (5) .
(7) If, under a retail shop lease, the rent is
to be reviewed during the term of the lease or any renewal or extension of the
lease, the rent payable for the rental period after the timing of an
invalid review is— (a) for an invalid review mentioned in subsection (11) ,
definition invalid review , paragraph (a) —the same as the rent payable
before the timing of the review; or
(b) for an invalid review mentioned in
subsection (11) , definition invalid review , paragraph (b) —the rent worked
out on 1 of the bases, chosen by the lessee, on which the review was made; or
(c) for an invalid review mentioned in subsection (11) , definition
invalid review , paragraph (c) —the rent worked out on 1 of the bases,
chosen by the lessee, on which the review was to be made under the void
provision.
(8) Subsections (2) to (7) do not apply if— (a) the lessee is a
major lessee; and
(b) before the lessee enters into the lease, the lessee
gives the lessor a written notice stating the lessee agrees that subsections
(2) to (7) do not apply in relation to the lease; and
(c) the lease provides
for the timing and basis for each review of the lease.
(9) To remove any
doubt, it is declared that neither of the following is a rent review— (a) an
adjustment of the rent merely to enable the lessor to recover GST from the
lessee;
(b) a rent concession.
(10) Nothing in this section prevents a
retail shop lease limiting the amount by which the rent payable under the
lease may be increased.
(11) In this section—
"invalid review" , of rent under the lease, means— (a) a review in a year of
the lease, other than the first year, in which the rent is to be reviewed
under the lease more than once; or
(b) a review made under the lease using
more than 1 basis; or
(c) a review under a provision of a lease that is void
under section 36 (1) (d) or (e) .
"year" , of the lease, means a period of 12 months starting on— (a) the day
the lease is entered into; or
(b) an anniversary of the day the lease was
entered into; or
(c) if, for a particular 12 month period, there is not an
anniversary of the day the lease was entered into—the last day of the month
corresponding to the month the lease was entered into. Note— Paragraph (c)
deals with a lease entered into on the last day of February in a leap year.
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