Repairs and maintenance
Disputes regarding repair and maintenance responsibilities in commercial and retail leases are common and often arise due to the challenge of determining whether an issue is related to structural repairs, general maintenance, or disrepair, which makes it difficult to assign responsibility.
General obligations
The Property Law Act 2023 (the PLA) Schedule 1 section 3 requires the tenant to “keep the leased premises, including any improvements made to the leased premises by the lessee with the consent of the lessor, and excluding any structural elements of the leased premises, in good condition”.
The lessor is usually obligated to maintain the:
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structure of the building
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building foundations and cracks in the walls (not caused by a customer or staff)
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common areas including carparks
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lifts and support systems.
Tenants are responsible for:
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keeping the shop clean and tidy, and
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for repairing any damage caused by their own actions or those of their employees or customers.
Tenants are typically responsible for repairs beyond reasonable wear and tear such as:
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repairing orinsuring their own equipment or fit-out
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caring for the carpets and flooring, glass windows and shop front
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fixing fans and changing lightbulbs
Specific items may be excluded or included in the terms of the lease. These lease terms (that were agreed to by both parties) would replace the PLA standard terms. Read our blog to find out more about changes to commercial leasing under the Property Law Act 2023.
Lease obligations
Review your lease or seek legal advice to get a clear understanding of any issues. The lease may differentiate and specify responsibility for:
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general repairs
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maintenance
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structural repairs
Air Conditioning
Generally, the lessor must ensure the air conditioning system is in good working condition when the tenant takes possession. It is typically the lessor’s responsibility to fix or replace the air conditioning system if, despite proper maintenance, it stops working.
Top tips
- Set reminders for scheduled maintenance required in the lease.
- QCAT or a court has jurisdiction for determining the category of the issue and assigning responsibility according to the law or the lease.
Electrical safety and utilities maintenance
It is mandatory a working electrical safety switch is installed in shops.
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The tenant is responsible for its upkeep to maintain a safe environment.
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The tenant is responsible for upkeep to infrastructure for services and utilities (e.g., wiring, wall plugs, taps and pipes in the premises) unless otherwise stated in the lease.
The liability may fall on the lessor if the tenant lacks access to the safety switch and the lessor refuses to address safety concerns.
Compensation
Section 43 of the Retail Shop Leases Act 1994 (RSL Act) details the compensation for loss or damage in certain circumstances. A clause in a retail lease that goes against provisions of the RSL Act is prohibited (under Section 16 of the Act).
Find tips in our article Asking For Rent Relief If Commercial Property Is Damaged Or Unusable.
Important facts
It is crucial for tenants to prioritise fixing such issues because they bear the responsibility of maintaining a safe workplace under legislation.
Leaking Roof
In general, it is the landlord’s responsibility to fix any leaks unless the lease explicitly states otherwise, or the tenant caused the leak.
Typically, a lease will state the tenant must have the appropriate insurance cover and a tenant may have to make a claim against their insurance for any damage to stock or fit-out caused by the leak.
Flood and cyclone help
The Queensland Legal Assistance Forum has published a fact sheet for flooding on leased premises and a fact sheet for small business impacted by floods or cyclones.
Regular servicing
The tenant may be obliged under the lease to perform regular servicing on items, such as air conditioning, automatic doors or grease traps. Neglecting these obligations may breach the lease, lead to termination or impact liability for repair costs.
Grease traps
Usually, a lease will state that a:
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tenant is responsible for maintaining the grease traps in continuous working order
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lessor will be responsible for work that amounts to structural maintenance or relates to capital expenditure.
Whether the grease trap is part of your ‘leased premises’ or on common property may impact who is responsible for the costs. Check the plan of the leased premises in the lease and check whether the grease trap sits within the parcel of land covered under the lease.
Mould
It is not always easy to determine the cause of mould (e.g. structural issues in a building or lack of regular cleaning). If the conditions that caused the mould are not fixed, it will return.
To get a decision from a tribunal or court you are likely to need evidence to prove what caused the mould. Tenants and landlords negotiating a solution and joint strategies to combat mould could avoid costly legal battles.
Resolving disputes
Consider the following steps:
- Seek legal advice from a lawyer experienced in commercial property law
- Check the lease to clarify responsibilities
- Communicate issues in writing
- Negotiate commercially sensible solutions
- Assess the cost and viability of pursuing legal proceedings to decide the dispute
- Make an application for mediation with the QSBC. A QSBC mediator can mediate a dispute up to $750,000 in value.
QCAT considers disputes between a tenant and landlord related to retail shop leases if the dispute is not resolved after mediation.
Courts consider disputes between a tenant and lessor for non-retail shop leases.
Wondering ‘Do I have a retail shop lease?’ then read our article What is a Retail Shop Lease in Queensland.
More information
Contact the QSBC by submitting an online enquiry or calling 1300 312 344.