It may already have come to your attention that the Minister for Justice intends to table an amendment to the Land and Conveyancing Law Reform Bill 2006 which will have the effect of rendering ineffective "upwards only" rent review clauses.
This is a very significant piece of legislation with potentially far reaching consequences for all stakeholders in the property market. We will be giving this draft legislation greater consideration over the next while. However in the meantime we have some initial thoughts: -
The Minister has indicated his intention to enact the Bill before 9th July 2009. However this does not mean that the relevant section will become operative immediately as the Minister has discretion as to when parts of the Act would come into force.
There is no provision for "contracting out".
It is intended to apply only to leases entered into following the coming into force of the section. Existing leases will not be affected.
Clearly the industry needs to understand the implications of this and we intend to provide updates over the next while to assist with that. However we would be interested in your thoughts on the matter.
For ease we attach a link to the relevant amendment at Section 131.