TURKS & CAICOS Law and Practice Contributed by: Oliver Chapman and Chris Smith, Griffiths & Partners Attorneys
6.5 Rent Variation It is typical for commercial leases to make provi - sion for rent to be reviewed. 6.6 Determination of New Rent Typically, rent is reviewed in relation to the mar - ket rent at the time of the review, based on a set of assumptions and disregards. 6.7 Payment of VAT No value added tax (VAT) is payable in the Islands. 6.8 Costs Payable by a Tenant at the Start of a Lease Stamp duty (see 2.10 Taxes Applicable to a Transaction ), any registration fees (nominal) and a security deposit are typically paid by the ten - ant at the start of the lease. Landlords also often request payment of rent for the final month of the term when the lease is entered into. 6.9 Payment of Maintenance and Repair The landlord typically recovers their costs from the tenant through rent or communal service charges. 6.10 Payment of Utilities and Telecommunications Where tenants have not purchased their electric - ity, water, gas and telecommunications services directly from suppliers, they will typically pay a share of these services provided by the landlord by reference to the size of their demised prem - ises, or the landlord will separately meter each premises. 6.11 Payment of Property Taxes The only “tax” that is payable on rental property is stamp duty, which is due on the grant of a lease. Please refer to 2.10 Taxes Applicable to
a Transaction , which sets out the relevant stamp duty rates for leases. 6.12 Insurance Issues It is usual for a landlord to restrict the use of the demised premises and common areas. Planning permission and zoning constraints would also apply. 6.13 Restrictions on the Use of Real Estate A lease will ordinarily prohibit the tenant from making alterations or improvements to the real estate without the prior consent of the landlord. 6.14 Tenant’s Ability to Alter and Improve Real Estate There are no specific regulations and/or laws that apply to leases of particular categories of real estate. Parties generally have the freedom to contract as they wish, although the Registered Land Ordinance does imply certain covenants on the landlord and tenant, unless modified in the lease. 6.15 Specific Regulations The terms of the lease usually allow a landlord to terminate the lease if the tenant becomes insol - vent. At the time of writing, specific insolvency legislation is in the course of being implemented. 6.16 Effect of the Tenant’s Insolvency It is common for a landlord to take a security deposit at the outset of a lease, and the landlord may require guarantees from directors, share - holders or related companies. Security deposits are freely negotiable but would likely include at least one rental payment. Secu - rity deposits are not regulated and so the terms of the lease would govern.
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