Management fees – Practice Note for LIV’s November 2012 lease revision

Robert Hay and Derry Devine of the Law Institute of Victoria’s Leases Committee have written a practice note about an issue with the November 2012 edition of the LIV’s standard lease.

Any practitioner using the November 2012 revision of that LIV standard lease should be aware of the practice note, which states that:

“When using the LIV Commercial lease for a retail premises lease containing an option to renew and under which management fees will be payable, it is recommended that:

• Item 10 of the Schedule be modified by deleting the paragraph beginning ‘If the Act applies’ and ending ‘section 49(4)’.
• The information relating to the amount of the management fee and the method of calculating the amount payable by the tenant, for the first accounting period of the lease term, be specified in the disclosure statement rather than the lease.  This will satisfy section 49(1)(b) without creating potential issues where an option is exercised.  When an option is exercised, the disclosure statement for the new term should also specify the management fee and the method of calculating the amount payable by the tenant for the first accounting period of the new lease.”

Robert’s blog post about the practice note is available here.