Among disputes arising from commercial leases in Australia, disagreements over responsibility for repairs and maintenance of the premises are one of the most common causes. In many cases, both the landlord and the tenant believe that the other party should be responsible, and if not handled properly, the dispute can easily escalate.

Today, NS Legal would like to discuss common rental repair disputes and how to address them.

Disputes over lease repairs and maintenance generally arise from one of the following two issues:

Which party is responsible for repairing or replacing a particular part of the premises;

When one party bears the repair obligation, failing to arrange repairs in a timely manner or failing to meet a satisfactory standard.

Who is responsible for arranging repairs and maintenance?

Generally speaking, the lease contract will set out how responsibility is divided between the tenant and the landlord.

Typically, the tenant is responsible for general repairs to ensure that the premises remain in the same condition as at the start of the tenancy, with the following exceptions:

Changes caused by “fair wear and tear”, which includes changes resulting from the tenant’s reasonable use and the normal operation of natural forces (such as the weather);

Structural repairs to the premises; or

Payments of a capital nature yet to be made (for example, alterations or capital injections that add value to the premises).

Tenants are generally required to deal with mechanical items that require repair, for example:

Boilers;

Air conditioning;

Exhaust fans.

Ultimately, however, it all comes down to what the lease says.

On the other hand, the landlord is generally required to address structural matters of the premises, for example:

Foundations;

Walls;

Fences;

Ceilings;

Stairwells;

Driveways.

In addition to the above repair obligations of the landlord, if the premises become wholly or partly unfit for occupation due to damage, the tenant is usually entitled to seek a reduction in rent, or even terminate the lease.

Tenants also generally have the right to “quiet enjoyment”, which in some circumstances can be interpreted broadly to cover situations of disrepair.

The difficulty of allocating responsibility

While these allocations of responsibility may appear straightforward in theory, in practice it is very difficult to distinguish responsibility between disrepair and damage.

The knock-on effects of structural problems are often not immediately apparent, and can be hard to separate out. For example:

It can be difficult to identify the cause of water leaks at the premises, and therefore whether the landlord or the tenant is responsible for the repair;

The lease may not address who is responsible for a particular category of repair. It is worth noting that the fact that the tenant is not responsible does not mean the landlord automatically is — you need to read the terms carefully;

The lease agreement may contain conflicting clauses;

Additional rights and obligations conferred by state-specific legislation (such as retail leasing legislation) also need to be considered. Where there is a conflict between the lease terms and the law, the law will prevail.

Another complicating factor is that the part of the premises requiring repair is sometimes common property on the plan. For example, it may be a shared stairwell or lift between different units, or a roof that covers multiple premises. In such cases, the landlord may need to cooperate with other landlords in the building to carry out repairs, which can also cause delays.

If you are not sure who is responsible, or do not know how to deal with a disrepair issue, we recommend contacting NS Legal early for legal advice, as there is no one-size-fits-all answer.

What can a tenant do if the landlord does not take repair issues seriously?

From the tenant’s perspective, if you have a disrepair issue at the premises that you believe is the landlord’s responsibility, and the landlord either denies it or drags it out, you should consider:

Keeping detailed records, photographing and documenting the dates on which the premises have been affected, and quantifying the economic loss you have suffered as a result of the issue;

Communicating with the landlord to make them aware of the issue, and creating a written record;

Reviewing your lease again to determine whether the landlord has an express obligation to carry out the repair, or whether there is a basis to seek a rent reduction because the leased premises are unfit for occupation;

If the repair obligations under the lease are unclear, you may still be able to bring a claim:

Based on the right to “quiet enjoyment”;

In tort, based on a breach of the duty to maintain the premises;

Based on statutory unconscionable conduct (where the lease is a retail lease).

Lease disputes typically have a formal dispute resolution process. This will involve issuing a formal notice or demand, followed by attending mediation. If your lease is a retail lease, mediation is usually a compulsory requirement for the landlord to attend.

Finally

If all else fails, you can seek to enforce your rights through the courts or a tribunal.

However, given the potentially complex nature of these disputes, you should seek legal advice before commencing any legal proceedings. Maintenance and repair issues are among the most common and potentially most complex lease disputes.

If you need help with a repair dispute, NS Legal has experienced lawyers who can assist you.