With Christmas holidays approaching, retail tenants and landlords are often required to resolve urgent issues without the assistance of real estate agents and lawyers. Here are some things to consider:
Under section 52(4) of the Retail Leases Act 2003 (the Act), the tenant may arrange for urgent repairs, for which the landlord is responsible under the Act, or under the terms and conditions of the lease under certain circumstances. While we recommend reviewing the legislation prior to taking any action, the key points to be aware of are that:
- the repairs must be necessary to fix a fault that is having a substantial impact on the business;
- the tenant does need to take reasonable steps to arrange for the landlord or agent to manage the situation first. So, it is important for the tenant to keep a record of all phone calls made or emails sent about the issue, and any ‘out of office’ notifications received. Most real estate agents will include a number to call in urgent matters, so it is important for the tenant to make a note of this and attempt this channel first;
- if the landlord fails to act, and the tenant arranges repairs that are the landlord’s responsibility under the Act or their lease agreement, they need to give their landlord written notice within 14 days of the details and cost of repairs to arrange for repayment; and
- The landlord must refund only the reasonable cost of repairs.
A note on air conditioners:
As the mercury rises, all too many air conditioners decide to call it a day and there is often confusion over whose responsibility it is to get it up and running again.
Section 52 of the Act provides an obligation on the landlord to maintain:
- the structure of, and fixtures in, the retail premises; and
- plant and equipment at the retail premises; and
- the appliances, fittings and fixtures provided under the lease by the landlord relating to the gas, electricity, water, drainage or other services.
A recent advisory opinion sought by the VSBC at VCAT also indicated that the landlord cannot pass on the costs of complying with section 52 to the tenant.
If your air conditioning unit does break down in a heatwave, be sure to follow the processes outlined above before arranging any urgent repairs.
Rent and outgoings
Over public holidays it can take longer for money to transfer, so tenants should make sure to allow an extra day or two for rent and bills to transfer so there are no issues with paying on time.
The Christmas holiday season can be overwhelming for the best of us, but if you find yourself particularly struggling with matters outside of your business – do not be afraid to seek help. Lifeline provides support for Australians experiencing personal issues and has a 24 hour crisis support and suicide prevention services – you can contact them on 13 11 14.
We will be putting together a collection of resources for maintain your mental wellbeing while running a small business in the new year – so keep an eye out for updates.