In brief: Leases precluded from the application of the Retail Leases Act 2003 (Act) because they commenced prior to 1 May 2003 (being the introduction of the Act) may fall within the scope of the Act if renewed. As such, obligations including the determination of a market rent and others under the Act may apply.
What you need to know:
You need to consider if the Act will apply to the determination of the rent, or in managing the property, where the lease has been renewed but the original lease commenced pre-1 May 2003.
Background
As you may recall from a previous update, a renewal of the lease creates a new lease as a matter of law and for the purposes of the Act.
Where conducting a rent review, or managing a property, you may think that because the initial lease predated 1 May 2003, that the Act does not apply. However, consideration needs to be given as to whether the Act will apply where a lease has been renewed and the renewal has occurred post 1 May 2003.
If the lease would be governed by the Act, had the original lease been entered into post 1 May 2003, then the renewal of that lease will be governed by the Act.
Conclusion:
When carrying out rent reviews, or in managing a property, careful consideration should always be given as to whether the Act applies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Madgwicks is a member of Meritas, one of the world's largest law firm alliances.
