Copyright Lex Mundi Ltd.

2009

ISSUES RELATING TO COMMERCIAL LEASING TRINIDAD AND TOBAGO Hamel-Smith

CONTACT INFORMATION Tiffanny Castillo Hamel-Smith Eleven Albion, Cor. Dere and Albion Streets Port of Spain 868.821.5500 tiffanny@trinidadlaw.com www.trinidadlaw.com 1. Describe [National][state][territorial][provincial] or local transfer taxes payable on creation or assignment of a lease. The stamp duty on the creation or assignment of a lease is as follows: (1) For a term of 3-35 years: 2% of the average yearly rent; (2) For long leases over 35 years: where the consideration for the sale does not exceed $300,000.00 TT- 2%; exceeds $300,000.00 TT but does not exceed $400,000.00 TT- 5%; exceeds $400,000.00 TT -7%: Stamp Duty Act, Ch. 76:01 2. Describe any legal restrictions limiting the maximum term of a lease (including renewals). There are no statutory restrictions limiting the maximum term of a lease including renewals. 3. Describe any laws requiring landlords to allow a tenant to renew its lease. Generally, at common law, in the absence of an option to renew clause specifically included in the lease, the lease terminates. The general practice is for the parties to include in the lease the terms of the option to renew, if negotiated. A tenancy from year to year may be implied from circumstances which would be sufficient to create such tenancy: section 6 of the Landlord and Tenant Ordinance Ch. 27 No 16. If

2100 West Loop South, Ste. 1000 Houston, Texas 77027 USA Tel: 1.713.626.9393 www.lexmundi.com

 Copyright Lex Mundi Ltd. 2009

property is held for a term of years and the tenant holds over at the end of the term, a yearly tenancy is established by the acceptance of rent by the landlord unless the intention to create a new tenancy can be disproved. Generally, a tenancy from year to year can be determined at the end of the first or any subsequent year and in the absence of a notice to quit, the tenancy from year to year goes on without interruption. 4. Describe any restrictions on rent that may be charged for to a tenant. There are no restrictions on the amount of rent that may be charged for commercial property. 5. Describe any laws permitting tenants to terminate a lease prior to its stated expiration date. There are no laws expressly permitting tenants under commercial leases to terminate a lease prior to its stated expiration date. 6. Describe any laws allowing tenants to assign or sublease without landlords consent. Generally, a commercial lease is assignable unless the lease provides otherwise. Some leases may provide that the written consent of the lessor must be obtained prior to the assignment. 7. Describe any laws allowing landlord to restrict assignments or subleases by tenants. Generally, a landlord may restrict assignment or subletting in the lease by requiring the written consent of the landlord. 8. What is the common form of eviction proceeding? What is the customary length of time for that proceeding? An action for recovery of the premises is made after a valid notice to quit is served on the parties: section 21 of the Landlord and Tenant Ordinance Ch. 27 No. 16. The proceedings must be brought by way of summary proceedings for possession of land by way of a fixed date claim: Part 68 of the Civil Proceedings Rules 1998. The length of time for same varies. 9. Are there any legal restrictions on pledging a leasehold interest as security for a financing? Generally, there are no legal restrictions on pledging a leasehold interest for financing. However, a lease may have a requirement that the written consent of the landlord is needed for assignment, subletting or otherwise parting with the whole or part of the property. 10. Describe any requirements for landlords to hold security deposits in separate accounts and, if
such requirements exist, describe if there can be one separate account for all tenant security deposits or whether each security deposit must be held in its own separate security deposit.

There is no statute that requires landlords to hold security deposits in separate accounts for commercial property. 11. Describe any required statutory or other legal disclosures to be made to all tenants. All commercial leases are governed by general contract principles.

2100 West Loop South, Ste. 1000 Houston, Texas 77027 USA Tel: 1.713.626.9393 www.lexmundi.com

 Copyright Lex Mundi Ltd. 2009

12. Describe all taxes on rent or other taxes that landlord are required to collect from tenants. A tax on rent is Value Added Tax (VAT). If the rent payable to the Landlord is in excess of TT$200,000.00, the Landlord may have to register with VAT administration and obtain a Vat registration number and collect VAT from the Tenant: Value Added Tax Act, Ch 75:06. 13. Describe any limitations on the ability of landlords to exercise self-help. A landlord unlawfully evicts even when he has obtained an order for possession if he resorts to self-help to take possession of the property. 14. Describe whether remedies such as acceleration of rent must be expressly stated or whether they
are implied.

Acceleration of rent is not common in Trinidad and Tobago and must be expressly stated in the lease. 15. Describe whether there are any expedited remedies for tenant default and, if so, what lease
provisions (such as waiver of jury trial, for example) would be required for a landlord to seek expedited remedies.

There are no expedited remedies for tenant default. 16. Describe any formal requirements for the execution of a lease. Leases for more than 3 years must be by deed and duly registered: Section 3 of the Landlord and Tenant Ordinance Ch. 27 No. 16. Every deed executed in Trinidad and Tobago, must be made in the presence of and attested by one witness at least not being a party to the deed and of a qualified functionary and the signing and delivery must be attested by one such witness at least subscribing his name with the addition of his place of abode or business and his profession, occupation or condition in life, and by the qualified functionary subscribing his name with the addition of his qualification: section 7 of the Registration of Deeds Act, Ch. 19:06. If a party is a company, the by-laws of the company usually stipulates how the execution of the document is to take place. Generally, two authorised persons usually sign the deed and the common seal of the company is affixed thereto. 17. Describe whether a memorandum of lease or other document would need to be recorded for the
lease to be enforceable against third parties.

Most commercial leases are stamped and registered since they usually are for more than 3 years and the law requires registration of a lease which is for more than 3 years. If the lease is for less than 3 years and it is not stamped and registered in the Land Registry of the Ministry of Legal Affairs, it is not enforceable against third parties in a court of law.

2100 West Loop South, Ste. 1000 Houston, Texas 77027 USA Tel: 1.713.626.9393 www.lexmundi.com

 Copyright Lex Mundi Ltd. 2009

18. Describe any restrictions on the transfer of ownership of real properties subject to a lease. Does such a transfer affect the tenants rights or obligations? There are no statutory restrictions on the transfer of ownership of property subject to a commercial lease. A transfer of property is subject to the terms of the lease.

2100 West Loop South, Ste. 1000 Houston, Texas 77027 USA Tel: 1.713.626.9393 www.lexmundi.com