On the expiration by effluxion of time of the term hereby granted, the lessee shall have a right to obtain, in accordance with the provisions hereinafter contained, a renewed lease of the land hereby demised, at a rent to be determined by valuation in accordance with the said provisions, for the term of [the same period of years for which the original lease is granted or any shorter period] computed from the expiration of the lease hereby granted, and subject to the same covenants and provisions as this lease, including this present provision for the renewal thereof, and all provisions ancillary or in relation thereto.

Within six calendar months previous to the expiry by effluxion of time of the lease hereby granted, or so soon thereafter as may be, a valuation shall be made of the fair annual rent of the land hereby demised, so that the rent so valued shall be uniform throughout the whole term of the renewed lease.

In making the said valuation no account shall be taken of the value of the following improvements on the said land: [Specifying, as the leasing authority thinks fit, the kinds of improvements, whether made during the term or at any other time, which are not to be taken into account in the valuation of the rent.]

The said valuation shall be made by two indifferent persons as arbitrators, one of whom shall be appointed by the lessor and the other by the lessee.

The arbitrators, before commencing to make the said valuation, shall together appoint a third person who shall be an umpire as between them.

The decision of the two arbitrators if they agree or in such respects as they agree, or of the umpire if the arbitrators do not agree or in such respects as they do not agree, shall be binding on all parties.

The duty of the umpire, on reference to him of any question, shall be to consider the respective valuations of the two arbitrators in the matters in which their valuations do not agree, and then to make an independent and substantive valuation, and the last-mentioned valuation shall be the decision of the umpire; but in giving his decision on any question so referred to him the umpire shall in every case be bound to make a valuation not exceeding the higher and not less than the lower of the valuations made by the arbitrators respectively.

The provisions herein contained for the making of a valuation shall be deemed to be a submission to arbitration under and within the meaning of the Arbitration Act, 1908, or any enactment for the time being in force in substitution therefor or amendment thereof, and all the provisions of any such enactment shall, so far as applicable, apply accordingly.

Within two calendar months after the making of the said valuation and the giving of notice thereof to the lessee, the lessee shall give notice in writing signed by him or by his agent duly authorised in that behalf and delivered to the lessor stating whether the lessee desires to have a renewed lease of the land.

Any such notice may be given by the lessee within the time aforesaid, although the term hereby granted has already expired by effluxion of time, or although the said valuation has not been made or notice thereof has not been given to the lessee until after the expiration of the said term by effluxion of time, unless before the giving of such notice by the lessee he has given up to the lessor the possession of the land hereby demised or has been duly ejected therefrom in pursuance of the judgment or order of any Court of competent jurisdiction.

Any such notice by the lessee of his desire to have a renewed lease shall be deemed to constitute a contract between the lessor and lessee for the granting and acceptance of a renewed lease at the rent so valued, and for the term and subject to the covenants and provisions referred to in clause 1 of these presents.

If the lessee fails within the time aforesaid to give any notice as to whether he desires a renewed lease or not, or if he gives notice in writing signed by himself or by his agent duly authorised in that behalf that he does not desire a renewed lease, his right to a renewed lease shall cease on the expiry of the time aforesaid, or on the date at which such notice is received by the lessor, as the case may be.

The term of any such renewed lease shall run from the date of the expiration of the prior lease, and the rent as so valued shall accrue as from the said date in lieu of the rent reserved in the prior lease, notwithstanding the fact that the renewed lease may not be executed until after that date.

The reasonable cost of any such valuation as aforesaid shall be paid by the lessee.

If the lease hereby granted is not renewed in accordance with the foregoing provisions, or if it is determined by forfeiture, re-entry, or otherwise, all buildings and improvements on the land demised shall absolutely revert to the lessor free from any payment or compensation whatever.

Any notice required to be given to the lessee in accordance with the foregoing provisions may be sent by post to his last known place of business or residence in New Zealand, and shall in such cases be deemed to have been duly received by him on the day on which it would be delivered at that place of business or residence in the ordinary course of post.

Nothing in the foregoing provisions shall exclude or restrict the right of the lessee to obtain relief against any forfeiture or determination of the lease or of his right to a renewal thereof in the same cases and on the same conditions as if the lease had been granted otherwise than in the execution of statutory-powers in that behalf.

The expression “lessor” as herein used includes the successors and assigns of the lessor, and the expression “lessee” as herein used includes the successors, executors, administrators, and assigns of the lessee.

Within six calendar months previous to the expiration by effluxion of time of the term hereby granted, two separate valuations shall be made—namely, a valuation of all the buildings and improvements then on the land hereby demised, whether erected or made during or before the commencement of the term hereby granted [or a valuation of any specified descriptions of buildings or improvements, as the leasing authority thinks fit], and another valuation of the fair annual ground-rent of the said land, without the buildings or improvements so to be valued, for a further term of [the same period of years for which the lease is granted or any shorter period] from the expiration of the term hereby granted, so as that rent shall be an even annual sum payable throughout the term without increase or diminution during the term.

The said valuations shall be made by two indifferent persons as arbitrators, one of whom shall be appointed by the lessor and the other by the lessee.

The arbitrators shall, before commencing to make the valuations, together appoint a third person who shall be an umpire as between them.

The decision of the two arbitrators if they agree or in such respects as they agree, or of the umpire if the arbitrators do not agree or in such respects as they do not agree, shall be binding on all parties.

The duty of the umpire, on reference to him of any question, shall be to consider the respective valuations of the two arbitrators in the matters in which their valuations do not agree, and then to make an independent and substantive valuation, and the last-mentioned valuation shall be the decision of the umpire; but in giving his decision on any question so referred to him the umpire shall in every case be bound to make a valuation not exceeding the higher and not less than the lower of the valuations made by the arbitrators respectively.

The provisions herein contained for the making of valuations shall be deemed to be a submission to arbitration under and within the meaning of the Arbitration Act, 1908, or any enactment for the time being in force in substitution therefor or amendment thereof, and all the provisions of any such enactment shall, so far as applicable, apply accordingly.

Before the expiration by effluxion of time of the term hereby granted, the right to a lease of the land hereby demised for a further term of [the period specified in clause 1 of these presents], containing the same covenants and provisions as are contained in this lease (including the provisions herein contained for valuation and for the offer of a new lease for sale by auction, and all clauses auxiliary or in relation thereto), shall be offered by the lessor by public auction at the upset annual rent of the said land as determined by the arbitrators or the umpire as aforesaid, without the buildings and improvements so valued as aforesaid, subject to the payment by the purchaser of the value of the said buildings and improvements as so determined by the said arbitrators or their umpire.

If any person other than the lessee becomes the purchaser at the said auction of the said right to a lease, that person shall within two calendar months from the date of the auction pay in cash to the lessor, in trust for the lessee, the amount of the value of the buildings and improvements so determined as aforesaid, and accept and execute a lease of the said land for the said further term at the annual groundrent at which the right to the said lease has been so purchased by him.

The lessor shall on demand (all rent and outgoings payable by the lessee having previously been paid) pay over to the outgoing lessee the amount of the value of the said buildings and improvements paid to the lessor by the said purchaser without any deduction whatever.

Nothing in these presents contained shall be deemed to render the lessor liable to pay to the lessee any part of the value of any buildings or improvements save after having received the amount thereof as aforesaid.

Upon any sale by auction as aforesaid of the right to a lease, the lessor may make usual and any other fan and reasonable conditions of sale to carry out the intention of these presents, and in particular shall provide for the payment by the purchaser at the auction (if a person other than the lessee) of a deposit of one-fifth of the amount of the valuation of the buildings and improvements, or of such smaller deposit as is agreed upon between the lessor and lessee, and that in the event of the purchaser refusing or neglecting to complete his purchase according to the conditions of sale he shall forfeit his deposit to the lessor for the benefit of the lessee.

In any such conditions of sale the lessor may in addition provide that, if the purchaser refuses or neglects to complete the purchase according to the conditions of sale, he shall pay to and for the benefit of the lessor as liquidated damages a sum not exceeding one-half of the total deficiency (if any) during the term of years of the rent agreed to be paid by the new purchaser at a subsequent sale by auction held in consequence of the default of the original purchaser, as compared with the rent that would have been reserved had such original purchaser not made default, together with all expenses attending the first sale.

If, owing to delay on the part of the arbitrators or the umpire or otherwise, the right to a new lease is not offered at auction before the expiration of the term hereby granted, or if, owing to the purchaser, other than the lessee, at any auction (whether the original auction or a subsequent one held on account of the default of the purchaser to complete) refusing or neglecting to complete his purchase according to the terms and conditions thereof, the purchase is not completed, then and in any such case the right to the new lease shall be offered at auction as soon as conveniently can be after the expiration of the term hereby granted or (as the case may be) after such refusal or neglect as aforesaid, notwithstanding that the term hereby granted has expired.

If the purchaser at the last-mentioned auction, being any person other than the lessee, makes default as aforesaid, the right to the new lease shall again be offered at auction as soon as conveniently can be after such default, and so on from time to time.

In every case in which the right to a new lease is sold by auction the new term shall run from the date of the expiration of the term hereby granted, but the rent shall not begin to run until the purchaser obtains possession.

The lessee shall have a right to bid for and to become the purchaser of the right to a new lease at any such auction.

The lessor shall be bound in all cases to accept at any such auction the highest bid made thereat for the new lease, if that bid is not less than the upset annual ground-rent as valued in manner aforesaid.

If at any auction there is no bid equal to or greater than the upset annual ground-rent as valued in manner aforesaid, then, at or (as the case may be) as from the expiration of the term hereby granted, the land hereby leased, with all buildings and improvements thereon (other than fixtures removable by the lessee before the expiration of the term), shall absolutely revert to the lessor free from any payment or compensation whatever.

At every auction held under the foregoing provisions the conditions of sale shall be the same (so nearly as may be) as those in respect of the first auction hereinbefore provided for.

In the event of the term hereby created being determined by forfeiture or otherwise than by effluxion of time, the lessee shall not be entitled to any compensation for buildings or improvements.

Nothing in the foregoing provisions shall exclude or restrict the right of the lessee to obtain relief against any forfeiture or determination of the lease or of any right in respect thereof in the same cases and on the same conditions as if the lease had been granted otherwise than in the execution of statutory powers in that behalf.

The expression “lessor” as herein used includes the successors and assigns of the lessor, and the term “lessee” as herein used includes the successors, executors, administrators, and assigns of the lessee.