In brief

If a lease has been varied, this can result in a new lease having been created from the date of the variation. For example, a 20 year lease entered into in 2002 that is varied say in 2018, may result in a new lease being created that is subject to the Retail Leases Act 2003 (Act).

What you need to know

A new lease will be created where the variation of lease amends the lease by:

1. enlarging the premises; or
2. extending the term of the lease.

There may be other circumstances in which a  new lease can be created but it will depend upon the particular circumstances.

It is clear that if a variation of lease increases the area of the premises, or the term of the lease, this creates a new lease. So, a lease that:

  • was entered into before the commencement of the Act; or
  • was not subject to the Act when the lease was entered into,

may as a result of a variation be subject to the Act.


I was recently engaged to give an expert opinion as to whether a 2002 lease that had subsequent variations brought the lease under the operation of the Act. In this particular case, the variation only varied some provisions in the lease and did not increase the size of the leased premises,  or increase the term of the lease. Further, the variation did not purport to create a new lease. As such, I concluded that a new lease had not been created. If a new lease had been created, this would have had significant consequences, as the tenant may have been able to claim back any land tax paid and the rent following the market review could fall, as the ratchet clause would not be applicable.


Accordingly, if you are carrying out a valuation, or advising on a lease that has been varied, it is important to get advice as to whether the variation of lease has created a new lease that may be subject to the Act.