The Retail Leases Act 2003 sets out certain requirements for the appointment of specialist retail valuers where there is a disagreement between a landlord and tenant regarding rent. The power to appoint a specialist retail valuer in this circumstance is a function of the Victorian Small Business Commissioner.

There are a number of provisions under the Retail Leases Act 2003 requiring the VSBC to appoint a valuer where the parties fail to agree on the appointment of their own valuer.  These provisions are as follows:

 - section 34(2)(b) - appointment of a specialist retail valuer when parties cannot agree on such appointment to determine the rent by valuation after the turnover rent clause has been deemed void as a result of it failing to comply with section 33;
 - section 35(7)(b) – appointment of a specialist retail valuer when parties cannot agree on the amount of rent after a rent review clause has been deemed void as a result of it failing to comply with section 35(2);
 - section 37(3)(b)- appointment of a specialist retail valuer when parties cannot agree on such appointment to determine the current market rent.
 - Sections 34(2), 35(8) and 37(3)(b) also make the provision that the "landlord and tenant are to pay the costs of the valuation in equal shares."

Dealing with the VSBC

Before you seek the assistance of the VSBC in appointing a specialist retail valuer consider whether the landlord and tenant have made a substantial effort on their own to reach an agreement on the rental amount and, if unsuccessful, a valuer, as is set out in sections 34(2), 35(7) and 37(3) of the Act. Ask yourself the following questions:

 - Has a rental amount been suggested by the landlord or tenant?
 - Has there been an attempt by all parties to reach an agreement on a rental amount?
 - Has there been an attempt by all parties to reach an agreement on a valuer?

If you feel that you satisfy the criteria for the VSBC to appoint a specialist retail valuer, download the application form here. Forward your completed application form to the VSBC (by fax on 03 9651 9943 or mail to Level 2, 121 Exhibition Street, Melbourne 3000) with a copy of the lease and evidence that the parties have made their own attempt to appoint a valuer.

It could be that dispute resolution with a mediator is a better alternative, or further negotiation with the other party may resolve the issue, so contact the VSBC on 03 9651 9316 to discuss the matter further.

Guidelines

On 4 August 2009, the VSBC released new guidelines about current market rent and the appointment of a specialist retail valuer. The guidelines can be downloaded here.