Determination of current market rent under options to renew
35 Determination of current market rent under options to renew
A retail shop lease that provides an option to renew or extend the lease at current market rent is taken to include provision to the following effect:
the current market rent of the retail shop is the rent that, having regard to the terms and conditions of the lease and other relevant matters, would be reasonably expected to be paid for the shop if it were unoccupied and offered for renting for the use to which the shop may be put under the lease;
the value of goodwill created by the lessee's occupation and the value of the lessee's fixtures and fittings on the retail shop premises are to be ignored for the purposes of the assessment of current market rent;
if the lessor and the lessee do not agree as to what the actual amount of that rent is to be, the amount of the rent is to be determined by valuation carried out by a person appointed by agreement between the parties to the lease or, failing agreement, appointed by the person for the time being holding or acting in the office of Chair of the
South Australian State Committee of the Australian Property
Institute Limited (or the holder of such other office representing property interests in the State prescribed by the regulations);
if a valuation is made to determine the rent, the valuer must give detailed reasons for the determination and must specify the matters (including, if relevant, incentives and concessions) taken into account in making the determination;
the parties to the lease are liable for the costs of a valuation under this section in equal shares.
There is no need for a valuation if the parties agree on the amount of the rent.
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