18 Jul Bad news for Landlords
Landlords are not able to pass on the costs of complying with their obligations under the Building Act to a tenant, nor are they able to pass on their costs incurred in complying with section 52(2) of the Retail Leases Act to a tenant, unless some of the exceptions contained in section 52 were to apply.
In an Order from His Honour Justice Garde in the referral of matters to VCAT for an advisory opinion pursuant to s 125 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) handed down on 1 May 2015, His Honour held that a landlord is for the most part responsible for the costs associated with the repair and maintenance of exit signs, emergency lighting, fire hose reel systems, sprinkler systems and portable fire extinguishers and those other items or equipment referred to as “essential safety measures” in the Building Regulations. A clause in a lease which seeks to pass the costs for such repairs and maintenance on to a tenant will be void.
A landlord is also required to comply with Section 52(2) of the RLA and to pay for the costs of such compliance, which requires the landlord to maintain the premises in a condition consistent with the condition of the premises when the retail premises lease was entered into: (a) the structure of, and fixtures in, the retail premises; (b) plant and equipment at the retail premises; and (c) the appliances, fittings and fixtures provided under the lease by the landlord relating to the gas, electricity, water, drainage or other services. A clause in a lease which seeks to pass the costs for the landlord’s compliance with section 52(2) (for example, in the form of an outgoing) will also be void.
Landlords should urgently ensure that their lease precedents are updated to reflect this Order.
Author – Joshua Kaplan
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