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Qld legislation to close rent ratchet “loophole”.

06/04/2011

In Connor Hunter (A Firm) v Keencrest Pty Ltd, the Supreme Court upheld a retail lease provision that required rent reviews at certain times subject to the proviso that the rent should not be less than  the rent payable for the preceding year. That allowed only one method of rental review at each review opportunity although the review was subject to a collar.  It did not offend the Retail Shop Leases Act 1994 (Qld) which prohibits rent being reviewed to the highest of several alternate bases.

The Criminal Code and Other Legislation Amendment Bill 2010 (Qld) was passed by the Queensland Parliament on 24 March 2011 and awaits Royal Assent. It will invalidate any ‘ratchet rent provision’ in a retail shop lease entered into after its commencement.  It captures provisions which:

  • prevent the rent from decreasing or
  • limit the amount of a decrease, or
  • require or permit a landlord to ignore a rent review.
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