sec.27Timing and bases of rent reviews

sec.27 Timing and bases of rent reviews

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. The rent may not be reviewed more than once in each year of the lease. Subsection (2) does not apply to the first year of the lease. The rent may be reviewed using different bases during the term of the lease, but each review must be made using only 1 basis. The basis for a rent review must be a single basis consisting of 1 of the following— the current market rent of the leased shop; an independently published index of prices, costs or wages; a fixed percentage of the base rent; a fixed actual amount; 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; another basis prescribed by regulation; a single basis formed by a combination of 2 or more bases mentioned in paragraphs (b) to (f) . 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) . 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— 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 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 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. Subsections (2) to (7) do not apply if— the lessee is a major lessee; and 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 the lease provides for the timing and basis for each review of the lease. To remove any doubt, it is declared that neither of the following is a rent review— an adjustment of the rent merely to enable the lessor to recover GST from the lessee; a rent concession. Nothing in this section prevents a retail shop lease limiting the amount by which the rent payable under the lease may be increased. In this section— invalid review , of rent under the lease, means— 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 a review made under the lease using more than 1 basis; or 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— the day the lease is entered into; or an anniversary of the day the lease was entered into; or 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. Paragraph (c) deals with a lease entered into on the last day of February in a leap year. s 27 amd 1999 No. 23 s 3 ; 2000 No. 19 s 13 ; 2006 No. 4 s 15 ; 2016 No. 21 s 24 ; 2017 No. 17 s 221 (sec.27-ssec.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. (sec.27-ssec.2) The rent may not be reviewed more than once in each year of the lease. (sec.27-ssec.3) Subsection (2) does not apply to the first year of the lease. (sec.27-ssec.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. (sec.27-ssec.5) The basis for a rent review must be a single basis consisting of 1 of the following— the current market rent of the leased shop; an independently published index of prices, costs or wages; a fixed percentage of the base rent; a fixed actual amount; 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; another basis prescribed by regulation; a single basis formed by a combination of 2 or more bases mentioned in paragraphs (b) to (f) . (sec.27-ssec.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) . (sec.27-ssec.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— 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 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 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. (sec.27-ssec.8) Subsections (2) to (7) do not apply if— the lessee is a major lessee; and 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 the lease provides for the timing and basis for each review of the lease. (sec.27-ssec.9) To remove any doubt, it is declared that neither of the following is a rent review— an adjustment of the rent merely to enable the lessor to recover GST from the lessee; a rent concession. (sec.27-ssec.10) Nothing in this section prevents a retail shop lease limiting the amount by which the rent payable under the lease may be increased. (sec.27-ssec.11) In this section— invalid review , of rent under the lease, means— 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 a review made under the lease using more than 1 basis; or 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— the day the lease is entered into; or an anniversary of the day the lease was entered into; or 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. Paragraph (c) deals with a lease entered into on the last day of February in a leap year.