Archive for category Buiiding Act

Landlord cannot recover essential safety measure costs or the costs of complying with s.52 of Retail Leases Act 2003 (Vic)

Landlords cannot require tenants under retail premises leases to undertake and pay for the work that a landlord must perform  to comply with the essential safety measure requirements contained in the Building Act 1993 (BA) and its regulations. Nor can a landlord require a tenant to pay as an outgoing the costs that the landlord has  incurred in complying with s.52 of the Retail Leases Act 2003 (RLA).

The BA and its regulations impose obligations on landlords to maintain buildings in a manner that complies with safety requirements that are commonly known as “ESM requirements”.

Section 52 of the RLA implies into a retail premises lease a requirement that the landlord maintain in a condition consistent with the condition of the premises when the lease was entered into the structure of, and fixtures in the premises and plant together with plant and equipment in the premises.

In a decision that will upset landlords and delight tenants the President of VCAT, Justice Garde, resolved long standing controversies in deciding that:

(a)   a requirement in a retail premises lease that a tenant perform ESM requirements that the landlord must perform under the BA or its regulations is void;

(b)   a requirement in a retail premises lease that a tenant pay for ESM requirements that the landlord must perform under the BA or its regulations is void;

(c)   if the obligation relating to the ESM is that the landlord must ensure that a result is achieved or a standard met the landlord may agree with the tenant to achieve that result, or meet the standard, and the tenant will be obliged to perform the lease at the landlord’s expense;

(d)   in the circumstances referred to in (c), the tenant can deduct the costs incurred in the performance of the term from the rent  or recover the costs of from the landlord;

(e)   a landlord cannot recover as outgoings the cost incurred by the landlord in complying with s.52 of the RLA.

See: In the matter of the referral of matters to VCAT for an advisory opinion pursuant to s.125 of the VCAT Act 1998 [2015] VCAT 478.

The decision will  have major consequences for tenants and landlords. In particular, tenants are likely to seek to recover from landlords any EMS costs that have been paid by the tenant together with costs that the landlord has incurred under s.52 and required the tenant to pay as outgoings.

I will be writing more about this decision.

Advertisements

7 Comments

Owners Corporation Law

Developments in strata body corporate law in Victoria

The Warne Account

The blog of Dan Warne, Australian tech writer.

Best Practices for Legal Education

A Vision and a Road Map

Tisher Liner FC Law Blog

Legal Updates on Business Law, Property and Litigation

THE NSW BAR -- A COMMENTARY

AN ASSOCIATION OF UNCOMMON PEOPLE

With Compliments

Geoffrey Gibson

CommBar Matters

Commentary and case law from the Commercial Bar Association's finest.

The law of land and sea

Australian law of property and environment

Amicae Curiae

Women. Law. Legal Education. Legal Practice. Career. Work/Life balance

Carrie Rome-Sievers, Barrister

Developments in insolvency and commercial law

Equity, Trusts and More

Travis Mitchell, Barrister at the Victorian Bar

Sam Ure

A Melbourne barrister practising in commercial disputes, tax and administrative law

The Property Law Blog

Robert Hay QC Property and Commercial Law Barrister

%d bloggers like this: