‘In Your Lease’ is an ongoing series where our resident lease experts offer their thoughts on common issues that arise when negotiating a lease or an extension to lease.
This issue examines three common obligations found in Agreements to Lease and outlines a few clauses to avoid under the Retail and Commercial Leases Act 1995 (SA) (RCLA) and/or the Landlord and Tenant Act 1936 (SA) (LTA). In addition to these clauses being void, breach of the RCLA and/or LTA could also lead to fines and/or damages being awarded against you.
1. Rent in Advance
Don’t require more than one month’s rent (or one twelfth of the annual rent) in advance before the tenant becomes entitled to occupy the premises.[1]
Don’t require payment of rent (other than the first payment) earlier than seven days before the commencement of the period of occupancy in respect of which the rent is payable.[2]
2. Security Bonds
Don’t require more than one security bond for the same lease/agreement.[3]
Don’t collect more than four weeks’ rent under the lease/agreement by way of security under a security bond.[4]
3. Adjustments on Base Rent
Don’t permit one party a discretion to decide which of two or more methods of calculating a change to base rent is to apply on a particular occasion.[5]
Don’t provide for base rent to change on a particular occasion in accordance with whichever of two or more methods of calculating the change would result in the higher or highest rent.[6]
For advice on lease terms or assistance in negotiation of lease clauses please contact Shavin Silva at Pace Lawyers on 8410 9294 or send an email via this form.
[1] Section 58(1) of the LTA.
[2] Section 58(2) of the LTA.
[3] Section 19(1)(a) of the RCLA and s 59(1)(a) of the LTA.
[4] Section 19(1)(b) of the RCLA and s 59(1)(b) of the LTA.
[5] Section 22(3)(a) of the RCLA.
[6] Section 22(3)(c) of the RCLA.