The Retail Shop Leases Act 1994 (Qld) has recently been amended by the Criminal Code and Other Legislation Amendment Act 2011 (Qld), which came into effect on 4 April 2011. These changes include a prohibition on the use of ratchet rent clauses in retail shop leases and also a clarification of compensation provisions.
Ratchet rent provisions
The introduction of the new section 36A to the The Retail Shop Leases Act 1994 (Qld) (RSLA) makes any ratchet rent provisions in a lease void. A transitional provision, section 134, provides that section 36A will apply to a retail shop lease entered into after 4 April 2011.
Under section 36A, the types of ratchet rent provisions that will be made void under the RSLA are those that:
- prevent a decrease in the rent under a rent review
- specify or limit the amount by which the rent may decrease under a rent review
- prevent, or allow the evasion of, the rent review by the lessor or another person for a purpose mentioned in paragraphs (a) or (b).
Section 43 of the RSLA has been amended to provide that compensation is payable by a lessor to an assignee in circumstances of a misrepresentation or false or misleading statement.
Section 44 of the RSLA has been amended to provide:
- if the amount of compensation payable is unable to be agreed upon between the parties, the dispute resolution process is to be used to decide the amount. This involves submitting to a mediation process or a hearing by the Queensland Civil and Administrative Tribunal of the retail tenancy dispute
- an agreement under the lease or an assignment of the lease which limits the amount of compensation payable is void.
A transitional provision, section 135, makes the amendments outlined above under sections 43 and 44 of the RSLA apply to a retail shop lease entered into, or assigned after, 4 April 2011.