Property problems: Ratchet clause likely to govern motel's lease
Q. I entered into a motel lease in 1996 for 27 years at a rental based at 42 per cent of turnover. The industry standard is around 33 per cent of turnover.
Wednesday, November 5th 2003, 12:29AM 
1 Comment
by The Landlord
The lease provides for a rent review every two years to the market rent. To date, the landlord has not increased my rent.
Due to its prime location and market, the property is now worth around $2 million (possibly more). Can the landlord increase the rent at the next rent review to the value of the property, even though the business has not grown and will not grow as no improvements have been made by the landlord or me?
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Comments from our readers
On 5 March 2011 at 3:16 pm Richard Tindall said:
Do Not buy a Motel Lease especially in Rotorua. They are all doing badly and you will loose everything you own, the worst investment mistake you could make. Commenting is closed
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