Sam Hopper, Counsel who we brief as a specialist barrister in retail leasing has published an update on the first and only case to consider the 23 August 2004 Ministerial determination regarding leases of 15 years or more falling outside the Retail Leases Act (RLA).
This determination has had great significance in sectors such as Early learning (ELC) and childcare where the leases can be anywhere from 10 years with options, or often 15 or 20-year initial terms with options.
Generally, it has been the case that where the Lease is for 15 years or more and required the tenant to do substantial works, or pay for them, the lease was considered to fall outside the RLA and therefore the landlord could charge the tenant land tax, legal costs, include a market rental ratchet clause and avoid the compulsory mediation obligations under the Act.
As Land Tax has substantially increased, this has been a major factor in Landlords trying to ensure the Lease is not a retail lease.