South Australian Current Acts

RETAIL AND COMMERCIAL LEASES ACT 1995 - SECT 22

22—Restrictions on adjustment of base rent

        (1)         In this section—

"base rent" means rent, or that component of rent, that comprises a specified amount (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, but this subsection does not apply to a change to base rent by a specified amount or specified percentage.

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 six 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 two per cent every six 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 to decide which of two or more methods of calculating a change to base rent is to apply on a particular occasion; 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 to decide 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 two 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 may result in a decrease of rent ¹ , a provision of the lease is void to the extent it prevents or enables the lessor or any other person to prevent the decrease.

Example—

1         A provision for the rent to change to current market rent.