Outgoings are the costs a landlord must pay in relation to the premises or in the case of a multi-occupancy property, such as a shopping centre, the premises and the property.

A landlord must provide the tenant with several pieces of documentation outlining outgoings (estimates and actual) at various points in the lease term.

Information a landlord must provide to a tenant regarding outgoings

Under various sections of the Retail Leases Act 2003 (the Act), the landlord must provide the tenant with the following information in relation to outgoings:

A copy of the lease at negotiation stage (section 15)

The landlord must provide the tenant with a copy of the lease as soon as negotiations begin. This must include a description of the outgoings that the tenant is expected to pay throughout the term.

Disclosure Statement containing estimates of outgoings (section 17)

A landlord must give a Disclosure Statement to the tenant at least seven days prior to entering into the lease. If a statement is not provided, the tenant is not liable to pay rent if they have provided the landlord with written notice within seven days before, or 90 days after, entering into the lease.

Estimate of outgoings (section 46)

A landlord must give the tenant a written estimate of the outgoings for which the tenant is expected to pay under the lease. This must be done before the lease is entered into, and one month before the end of the landlord’s accounting period. The tenant is not required to pay for outgoings until the estimate is given.

Statement of outgoings (section 47)

All the landlord’s expenses must be detailed in an audited statement, which contains the accounting periods and related outgoings to which the tenant is liable to contribute. The landlord must give the statement to the tenant no later than three months after the end of each accounting period.

Note the statement does not have to be audited if the tenant is only required to pay for GST, utilities, council taxes and insurance, and the statement is accompanied by the relevant invoices, assessments or receipts.

Advertising & promotion statement (section 71)

If the tenant is located in a shopping centre, the landlord must provide a written audited statement that details all expenses relating to advertising and promotion by the landlord in each of the landlord’s accounting periods.

The landlord must give the statement to the tenant no later than three months after the end of each accounting period.

VCAT rulings

The Victorian Civil and Administrative Tribunal (VCAT) has handed down a number of decisions regarding the payment of outgoings. These include:

Other decisions can be found on the Australian Legal Information Institute (AustLII) website.

VCAT Advisory Opinion – Essential Safety Measures

An Advisory Opinion on Essential Safety Measures was handed down by VCAT on 1 May 2015.

The key elements are that:

  • A landlord must bear the cost of compliance with essential safety measure obligations, and cannot pass these costs on to the tenant;
  • For some obligations, the landlord may agree with the tenant for the tenant to meet the requirements, but at the landlord’s expense;
  • More generally, the landlord cannot pass on to the tenant as outgoings the cost of complying with certain repair and maintenance obligations under the Retail Leases Act 2003.

For more details on the VCAT Advisory Opinion on Essential Safety Measures click here.

Testimonials

Client testimonials

×