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Consultation Paper on the General Law of the Landlord and Tenant

Consultation Paper on the General Law of the Landlord and Tenant

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<strong>on</strong>e. 33 Disputes as to <strong>the</strong> new rent to follow a review 34 would bereferred to <strong>the</strong> Private Residential Tenancies Board 35 fordeterminati<strong>on</strong> in accordance with <strong>the</strong> dispute resoluti<strong>on</strong> proceduresset out in Part 6 <strong>of</strong> <strong>the</strong> Bill. For obvious reas<strong>on</strong>s <strong>the</strong> Commissi<strong>on</strong>c<strong>on</strong>siders it inappropriate to trespass up<strong>on</strong> <strong>the</strong> territory covered by <strong>the</strong>2003 Bill.8.12 There remains <strong>the</strong> issue whe<strong>the</strong>r some similar schemeshould be introduced for <strong>the</strong> business tenancies sector. TheCommissi<strong>on</strong> is clear that it would not be appropriate to impose am<strong>and</strong>atory statutory scheme. This would run counter to <strong>on</strong>e <strong>of</strong> <strong>the</strong>guiding principles stated in <strong>the</strong> <str<strong>on</strong>g>C<strong>on</strong>sultati<strong>on</strong></str<strong>on</strong>g> <str<strong>on</strong>g>Paper</str<strong>on</strong>g> <strong>on</strong> BusinessTenancies, 36 <strong>and</strong> reiterated earlier in this <str<strong>on</strong>g>Paper</str<strong>on</strong>g> 37 namely, “removal <strong>of</strong>legislative provisi<strong>on</strong>s which militate against commercial practice <strong>and</strong>operati<strong>on</strong> <strong>of</strong> free market choice”. The fact is that in <strong>the</strong> case <strong>of</strong>business tenancies <strong>the</strong>re is <strong>of</strong>ten much negotiati<strong>on</strong> over <strong>the</strong> terms <strong>of</strong><strong>the</strong> rent review provisi<strong>on</strong>s, in particular <strong>the</strong> basis for calculating <strong>the</strong>new rent <strong>and</strong> including <strong>the</strong> various assumpti<strong>on</strong>s <strong>and</strong> disregards. 38However, <strong>the</strong> Commissi<strong>on</strong> is aware that <strong>of</strong>ten rent review clauses arenot drafted as well as <strong>the</strong>y might be <strong>and</strong> prove to be defective in <strong>on</strong>eway or ano<strong>the</strong>r. There is, <strong>the</strong>refore, an argument for providing astatutory form <strong>of</strong> “model” clauses 39 which <strong>the</strong> parties would be free toadopt or which would operate as “default” provisi<strong>on</strong>s where <strong>the</strong>parties have failed to provide for certain matters. This could beparticularly useful in relati<strong>on</strong> to matters such as <strong>the</strong> procedure ormachinery for carrying out <strong>the</strong> review. 40 The Commissi<strong>on</strong>provisi<strong>on</strong>ally recommends that in <strong>the</strong> case <strong>of</strong> n<strong>on</strong>-residentialtenancies it would be appropriate to provide a statutory model <strong>of</strong> rent3334353637383940Secti<strong>on</strong> 21.It may result in an increase or reducti<strong>on</strong> in <strong>the</strong> existing rent: secti<strong>on</strong> 24(2).To be established under Part 8 <strong>of</strong> <strong>the</strong> Bill.LRC CP 21-2003 at 5.Introducti<strong>on</strong> paragraph 2.See Wylie op cit paragraph 11.26 <strong>and</strong> following.The statutory model could be based <strong>on</strong> <strong>on</strong>e <strong>of</strong> <strong>the</strong> models frequently usedin practice, such as <strong>the</strong> <strong>Law</strong> Society/IAVI recommended clauses: seeWylie op cit paragraph 11.03.Including its initiati<strong>on</strong>, <strong>the</strong> time-scale <strong>and</strong> who does it when <strong>the</strong> partiescannot agree.117

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