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Retail Tenancies Reform (Amendment) Bill
Circulation Print
EXPLANATORY MEMORANDUM
Clause 1 sets out the purpose of this Bill, which is to amend the rent
review provisions of the Retail Tenancies Reform Act 1998.
Clause 2 provides for this Bill to come into operation on the day after the
day on which it receives the Royal Assent.
Clause 3 amends the commencement section of the Retail Tenancies
Reform Act 1998 by adding a new sub-section (4) which
provides that the Act is deemed to have been enacted as amended
by clause 4 of this Bill. The Retail Tenancies Reform Act 1998
received Royal Assent on 28 April 1998. Part 1 came into
operation on that day and the rest on 1 July 1998.
Clause 4 amends section 12(2) of the Retail Tenancies Reform Act 1998.
That section limits the basis or formula on which a rent review
under a retail premises lease may be made. Section 12(2)(a)
currently provides that one possible basis or formula is a fixed
percentage of the base rent. In Khodr v Foo Qan Eng Holdings
Pty Ltd (25 January 2001) the Victorian Civil and Administrative
Tribunal construed the reference in section 12(2)(a) to "base
rent" as a reference to the initial rent paid under the lease. The
amendment removes the words "of the base rent" thus
overcoming the effect of the Khodr decision and allowing, for
example, a lease to provide for a fixed percentage increase
throughout the term of the lease on the previous year's rent. A
similar approach was taken under the Retail Tenancies Act 1986
as amended by the Retail Tenancies (Rent Review) Act 1991.
Clause 5 amends section 52 of the Retail Tenancies Reform Act 1998 to
insert transitional provisions for this Bill. The effect of these
provisions is that this Bill will not affect proceedings determined
or hearings concluded by the Victorian Civil and Administrative
Tribunal before its passing or appeals from those matters. Retail
premises leases entered into before the passing of this Bill that
use a fixed percentage for rent review purposes have the effect
541245 BILL LC CIRCULATION 10/10/2001
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they would have had if section 12(2) of the Retail Tenancies
Reform Act 1998 had been amended as provided by this Bill at
the time the lease was entered into. The intent is to ensure the
validity of rent review provisions that were, for example,
expressed as a fixed percentage of a previous year's rental.
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