expert advice: Robert Toth and Kristen Attard | Sanicki Lawyers
RETAIL LEASINGREPAIR & MAINTENANCE OBLIGATIONS - Part 1 Who is liable for repairs and maintenance costs when the roof is leaking, the roller door jams, and the air conditioning stops working? Disputes between landlords and tenants in relation to repair and maintenance obligations continue to be an active area of dispute. This article focuses on retail premises covered by the Retail Leases Act (Vic) 2003 (RLA). Whilst the RLA is Victorian legislation, there is similar legislation in each State and Territory. Post Covid, retail tenants who managed to survive and were able to obtain rent relief from their landlords have then had to deal with issues regarding repair and maintenance costs of their leased premises. We have been involved in several Small Business Commission (VSBC) mediations where landlords have refused to undertake necessary repairs, or a dispute has arisen as to who is liable for the cost of those repairs.
The Starting Point When retail leasing laws came into being, most people assumed a landlord had a common law obligation to provide a tenant a wind and watertight premises. However, it may come as a surprise this is not the case. This may be why commercial leases have contractual obligations in the lease that states the landlord will provide a “wind, watertight and structurally sound” building. Tenants expect this to be the case when they lease premises. A non-retail lease can exclude obligations on a landlord for structural repairs. Retail Leases legislation was enacted to give some protection to retail tenants around disclosure and the legislation has (in a rather complex way) sought to clarify these obligations. However there continues to be confusion and 46 business franchise MAGAZINE
we have had to rely on a number of VCAT decisions to clarify where the obligations for repairs and maintenance actually lie between a landlord and tenant. Many landlords and their agents may be surprised as to their responsibilities to repair and will often seek to pass costs of repairs and even maintenance on to their tenant when they have no right to do. Many responsible landlords will do what is required to maintain a positive relationship with their tenant, but many do not. In addition to the retail leasing legislation, there are a number of other laws that can
impact on the landlord’s obligations under the Victorian Building Act 1993, and the OH&S Legislation (with similar legislation in each State and Territory). Although there are some differences between the various State Acts, largely the obligations on landlords are the same but landlords and tenant need to ensure they seek legal advice in their own State or territory.
Basic Principles Ok so hold on and take a seat! Section 52 of the RLA provides a landlord is required to maintain the following items
