The Victorian Parliament has passed amendments to retail leases legislation that aim to address uncertainty created by a court ruling earlier this year that challenged the validity of commonly-used fixed percentage rent review clauses.
The ruling by the Victorian Civil and Administrative Tribunal in the
Khodr case interpreted 'base rent' as the initial rent paid when the lease is first entered into, rather than the most-recently adjusted figure.
The solution developed by the Bracks government has the support of the Law Institute of Victoria, the Australian Retailers Association and the Property Council of Australia.
"The decision, if left unchecked, could have potentially left landlords and tenants exposed to the uncertain outcome of a market-rent review," Small Business Minister Marsha Thomson says.
"The new law amends the
Retail Tenancies Reform Act 1998 to ensure the validity of retail leases that adjust rent by a fixed percentage."
Thomson recently released a discussion paper that outlines a draft blueprint to improve the state's retail tenancies laws.
Copies of the paper can be obtained by clicking
here or calling the Office of Regulation Reform on (03) 9651 9719.
The deadline for submissions is November 9.