A recent Ministerial Determination stated that tenants
that are foreign listed companies are outside the Retail Lease Act
2003 (Vic) (Act).
In brief: As outlined in our recent
Valuer Update, a recent Ministerial Determination stated that
tenants that are foreign listed companies are outside the Retail
Leases Act 2003 (Vic) (Act). However, for market
rent reviews prior to 12 August 2016, you need to enquire further
whether such a listed tenant was on a Stock Exchange that was a
member of the World Federation of Exchanges
What you need to know:
If you are conducting a market rent review for a period prior
to 12 August 2016, the lease may not be governed by the Act.
If a tenant is a foreign listed company, further research may
be required to determine if the tenant was listed on a foreign
stock exchange that is/was a member of the WFE.
If the Stock Exchange is/was not a member of the WFE, then a
further investigation may be needed to ascertain whether the Act
applies to the lease in question.
Prior to 12 August 2016, a lease would not be governed by the
Act where the tenant was a foreign company listed on a foreign
Stock Exchange that was not a member of the WFE. On 12 August 2016,
there was a Ministerial Determination which provided that the Act
applied to a lease, where the tenant, or its subsidiary, was listed
on a foreign Stock Exchange, regardless of whether the stock
exchange was a member of the WFE.
The difficulty that emerges is that if you are conducting a
market rent review for a period prior to 12 August 2016, further
enquiries need to be made where the tenant is a foreign listed
company. We were recently asked to advise on such a situation where
the tenant was listed on the Frankfurt Stock Exchange, which was a
member of the WFE. However, the tenant only became listed on the
Frankfurt Stock Exchange in December 2015, and the market review
was for a date prior to December 2015. Through further research, we
ascertained that the tenant had been listed on the Johannesburg
Stock Exchange prior to December 2015, which was a member of the
WFE from 1963.
In undertaking and market rent review for a period prior to 12
August 2016, where the tenant is a foreign listed company, further
research is often required to ascertain as to whether the tenant
was listed on a foreign stock exchange that is a member of the
Naturally, the additional research is only required if the lease
would otherwise be governed by the Act. The answer is not always
easy and often requires detailed research as to when stock
exchanges became members of, or when they left the membership of
the WFE. If in doubt, please do not hesitate to contact us for
expert legal advice.
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
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Whilst option to purchase clauses are more in commercial properties, they are now being included in residential leases.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).