Renovation, repair, wear and tear: Who wears the responsibility?
A common issue faced by landlords is figuring out who is responsible for certain repairs to a property. From a legal perspective, the answer is not always clear. Firstly, the law around this topic differs depending on the classification of the lease as being commercial, residential, or retail. It can also influenced by statute and common law as well as specific contractual terms between the parties.
What the law says
There are three key areas which will address who holds responsibility:
1. The Property Law Act
Tenants in long term Leases under the Property Law Act 1974 (Qld) (PLA) are required to keep the property in good and tenantable repair, having regard to their condition at the commencement of lease under Section 105(2).
There are certain exceptions to this rule, namely that the Tenant is not responsible for damage caused by fire, flood, lightning, storm and tempest, or reasonable wear and tear
2. Terms within the contract
The PLA will apply unless a clause within the lease determines otherwise. It is therefore important to carefully read and consider the terms used within a commercial lease to establish the liability of the parties to maintain and repair the Property.
3. Common Law
Disputes between landlords and tenants often occur as to whether a certain works will be considered a repair or whether it will be considered a renewal or improvement. This will determine whether the responsibility falls upon the landlord or the tenant, and often the distinction is not clear. A case highlighting this issue was Lurcott v Wakely & Wheeler, where it was held that:
“Repair is restoration or replacement of subsidiary parts of a whole … Renewal is reconstruction of the entirety, meaning by entirety not necessarily the whole but substantially the whole subject matter under discussion.”
As such the question to be is asked is whether the works affect distinctive defective parts of the property, or whether they are a renewal or replacement of “substantially the whole”.
This occurs where, for example, a part of the premises cannot be repaired without being completely re-built. As such, tenants have been held responsible to replace certain defective parts of building including roofs and walls as part of their duty to repair, however each case must be assessed individually against the obligations set out in the lease.
‘Reasonable wear and tear’
Most leases provide that the tenant is not responsible for damages caused by reasonable wear and tear, that is, damage which occurs as a result of ordinary use of the premises by the tenant.
However, it is not always easy to determine what constitutes reasonable wear and tear, and in the instance of a dispute it will be the responsibility of the tenant to establish that the damage is a result of this.
There are instances where tenants may be liable for repairing defects which occur as a consequence of the reasonable wear and tear. For example, the tenant may be not be responsible for repairing windows where the seals have perished, but may be responsible for consequential damages to the carpet from water damaging the carpet and floor of the premises if they take no steps, such as notifying the landlord, to have the Windows repaired.
It is unclear in Australia whether, at common law, a tenant is responsible for repairing defects caused by a structural defect in the property. The vast majority of commercial leases will expressly address this point and establish that it is the landlord’s responsibility.
Failure to repair the property will result in a breach of the lease by the landlord. An important thing to remember for landlords is that their leases should adequately deal with the quality of repair required under the Lease.
How we can help
Streten Masons Lawyers deals with a range of leasing matters and are able to assist landlords to know their rights and responsibilities in relation to their properties. If you have any questions please contact one of our experienced solicitors on (07) 3667 8966.
Charlotte Streten – Paralegal