Page 5478 - Week 17 - Wednesday, 4 December 1991
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Consider the options for a tenant who, faced with a lease about to expire, is brought into a bona fide dispute with the landlord over some other aspects of the lease agreement. The tenant's rights become illusory because to insist on those rights is to lose the business altogether when the lease is not renewed. The mere implied threat of such a possibility is enough to make the tenant desist from complaining and swallow the bitter pill of an oppressive lease condition or excessive rent rises.
Our landlord sector has argued strongly for the right to renew their Crown leases, while the Liberal Party has reiterated their policy of leases in perpetuity. There are no suggestions of payment for the increased occupancy rights under Crown lease here. No, the Liberals would have to be consistent to allow very limited rights or at least the opportunity to be offered a renewal granted under this Bill. The Bill also provides for the tenant at least to be given an option to renew, with the landlord having the right not to make an offer if he proposes to change the mix in the centre. However, the tenant is at least to be offered some form of compensation for his part of the goodwill of the business - not all, of course, but that part which can be readily identified. The provisions for this are in clause 8 of the Bill.
The rent calculation provisions provide for increases in accordance with a number of options: Gross rental, where all operating expenses are paid by the landlord; net rental where operating expenses are divided equally between landlord and tenant; and net rental where the tenant pays all the operating expenses. I give you one example of an inequitable situation where a restaurant in Civic is required to pay the total amount of excess water for the whole building. I suggest that that is totally inequitable and needs to be looked at. Of course, for the tenant to get out of that arrangement, he would actually end up losing his business.
The rental provisions appear in clause 9. There is also a provision in subclause 11(7) to remove any ratchet clause; this allows rent to be reduced if the market rent actually goes down. There is always that possibility. There is also a requirement for operating expenses to be clearly specified and audited statements to be provided to tenants, with a requirement for both parties to recover any adjustments in a court of competent jurisdiction, if necessary.
The Bill also provides certain rights to both parties when an assignment of the lease is sought. However, the landlord also has a right to refuse an assignment, but only on good grounds. We have also provided for better control over bonds by making use of the facilities already established by the Rental Bond Board. A landlord can seek only two months' rent, which can also be made by bank guarantee. In such circumstances, there is no requirement to lodge the bond with the board.
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