21Minimum 5 year term

21 Minimum 5 year term

(1) The term of a retail premises lease, including any further term or terms provided for by an option for the tenant to renew the lease, must be at least 5 years or, if the term remaining under any head lease under which the landlord holds the retail premises is 5 years or less, the length of that remaining term less one day.

Note to s. 21(1) amended by No. 82/2005 s. 12(1).

The landlord or tenant may, in accordance with the lease or this Act, be able to terminate the lease before the end of the term if, for example, there has been default, relocation, demolition or damage to the retail premises.

(2) In applying subsection (1), an option conferred after the lease was entered into must be disregarded.

S. 21(2A) inserted by No. 82/2005 s. 12(2).

(2A) In applying subsection (1) to a retail premises lease to which this Act applies because of section 12(2), account must be taken of any period during which the tenant was continuously entitled to possession of the retail premises before the day on which this Act first applied to the lease.

Section 8 provides that an assignment of a retail premises lease is taken to be a continuation of that lease.

(3) This section does not apply to a renewal of a lease if there is no break in the tenant's entitlement to possession of the retail premises.

This means that a renewal of a lease is not required to be for 5 years because the minimum 5 year term requirement applied to the lease when it was entered into and the availability of the renewal will have been taken into account in determining the term of the lease.

(4) A lease that is entered into contrary to this section is not illegal, invalid or unenforceable because of that fact but the term of the lease is extended by the period that is necessary to ensure the lease complies with this section.

For example, if a lease is entered into for a term of 3 years, its term is extended by 2 years to 5 years. If a lease is entered into for a term of 2 years with an option for a further 1 year after the initial 2 years, the term of the lease is extended to 4 years (with the option for a further 1 year after the initial 4 years).

(5) This section does not apply to a lease if—

S. 21(5)(a) amended by Nos 82/2005 s. 12(3)(6), 69/2012 s. 5, 16/2017 s. 34(1).

(a) at the request of the tenant or prospective tenant, the Small Business Commission certifies in writing that it, or a person acting on its behalf, has explained to the tenant or prospective tenant—

(i) the effect of subsections (1) to (4); and

S. 21(5)(a)(ii) amended by No. 82/2005 s. 12(4)(6).

(ii) that the giving of the certificate and the giving by the tenant or prospective tenant to the landlord of a copy of the certificate under paragraph (b) will result in this section not applying to the lease; and