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ZuluAsking for rent relief if commercial property is damaged or unusable
If you believe you are entitled (under your lease or legislation) to rent relief (also known as a rent abatement), then it is likely you should put a proposal to the landlord, their agent or the shopping centre manager for consideration as the first step in negotiating an agreement on rent relief.
- Notify the landlord of the damage or loss of access in writing as soon as possible.
- Take (and send) photos and videos of the whole premises (needed to calculate the area that is unusable vs usable). Find and keep the receipts for any damaged goods.
- Get expert evidence or reports to record the damage and causes. Get any reports or advice in writing especially if the impact is invisible – e.g. bad smells, loss of electricity or equipment failure.
- Seek help in calculating the loss and/or reduction in rent that you will ask for (call your accountant or if in financial hardship – the Small Business Debt Helpline on 1800 413 828 who may assist in calculations – this creates a justifiable calculation of the figures).
- Send a proposal to the landlord or agent in writing with your evidence and state a reasonable time you’d expect to get a response.
- Prepare to negotiate and if that fails apply for mediation with the QSBC.
Understanding your lease and the Retail Shop Leases Act 1994 (particularly sections 42, 43 and 43AD and section 44) and/or the Property Law Act 1974 (potentially section 105) applies to your situation is important.
You should Seek Legal Advice.
The below information is taken from this fact sheet from Legal Aid Queensland and this article is not intended as legal advice: LegalAidQLD_commercial_and_retail_leases.pdf: “What if access to the building is prohibited or the building is unusable because of safety concerns?
“In the case of a multi-tenanted building, the leased premises may not be damaged or destroyed (such as in the case of an office building), but access may not be possible or the premises not useable for a period of time, mainly due to safety concerns (eg damaged fire safety systems or damaged services). If there is no damage to the building, the damage and destruction clause, discussed above (in the fact sheet), will not apply.
Therefore, an abatement of rent will only be possible if the lease expressly provides for abatement in the case of access or essential services to the building being interrupted by natural disaster or by agreement with the landlord. Likewise, the tenant will not be entitled to terminate the lease unless:
- the lease contains an express right to terminate in this type of circumstance or
- the landlord guarantees access to the building (unlikely) and the landlord has failed to take reasonable steps to ensure access is restored within a reasonable time or
- the landlord’s conduct has negligently increased the loss or damage to the tenant so that there is a breach of the covenant for quiet enjoyment (failing to reconnect air-conditioning within a reasonable time of gaining access to the building; failing to properly maintain the property prior to flooding which increased the damage or loss); this will require clear evidence of the landlord’s negligence or
- the inability to access the property is for such an extended and unreasonable period, having regard to the remaining period of the lease, that there is a frustration of the lease. This is an unlikely result and would require a significant and extended period of delay in access.”
There are other articles related to this topic available by searching online and some are included below for your convenience:
What if Commercial Premises are damaged? – Prime Lawyers
A guide to legal issues for landlords and… | HopgoodGanim Lawyers
What to do when your premises are damaged due to weather | Bartier Perry Lawyers
Common Leasing Disputes: Repairs and Maintenance
Commercial leases – Responsibility for repairs and maintenance – LawBase
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