ACT
See sections 81-82. The landlord is liable to pay the tenant reasonable compensation for loss or damage (other than nominal loss or damage) suffered by the tenant if the landlord adversely affects the trade of the tenant by the landlord's conduct without reasonable cause, whether by act or omission.
For example, if the landlord:
- materially inhibits access by the tenant to the premises; or
- takes action that would materially inhibit or alter the flow of customers to the premises; or
- fails to fix a breakdown of plant or equipment under the lessor’s care and maintenance as soon as practicable; or
- for premises located in the retail area of a shopping centre, does not adequately clean, maintain or repair the shopping centre (including common areas).
In working out reasonable compensation for section 81, any concession given to the tenant (for example, reduced rent) based on the disturbance, or likelihood of disturbance, of the tenant’s trade must be taken into account.
NSW
See section 34. A landlord is required to pay reasonable compensation for loss or damage suffered by the tenant if the landlord:
- inhibits access to the shop in a substantial manner; or
- takes action that would alter substantially the flow of customers; or
- unreasonably takes action that causes significant disruption of trading; or
- fails to take reasonable steps to prevent disruption; or
- fails to rectify the breakdown of plant and equipment under the landlord's care or maintenance; or
- fails to adequately clean, maintain or repair common areas of an RSC,
and the landlord does not rectify the matter as soon as reasonably practicable after being requested by the tenant in writing to do so.
Certain exceptions apply to Transport for NSW, Transport Asset Holding Entity of New South Wales, Sydney Metro, Sydney Trains and NSW Trains (as landlords), where any disturbance is done for safety or security in respect of a railway or railway station, or satisfying a regulatory requirement – see section 82A.
A retail lease may include a provision preventing or limiting a claim for compensation if a written statement containing details of the anticipated disturbance was given to the tenant before the lease was entered into and the statement included specific description of the nature of the disturbance, a statement assessing the likelihood of the disturbance, a statement about the timing, duration and effect of the disturbance (so far as it can be predicted).
NT
See section 47. The landlord is liable to pay reasonable compensation to the tenant if it does not rectify any of the following matters as soon as reasonably practicable after receiving written notice from the tenant:
- inhibits access of the tenant to the shop in a substantial manner;
- takes an action that would inhibit or alter, to a substantial extent, the flow of customers to the shop;
- unreasonably takes an action that causes significant disruption of, or has a significant adverse effect on, trading of the tenant in the shop (applying the shopping centre management practices);
- fails to take all reasonable steps to prevent or put a stop to anything that causes significant disruption of, or which has a significant adverse effect on, trading of the tenant in the shop and that is attributable to causes within the landlord's control;
- fails to rectify a breakdown of plant or equipment under the landlord's care or maintenance; or
- fails to adequately clean, maintain or repair the retail shopping centre, including common area.
The lease can limit liability for compensation in respect of a particular occurrence where the likelihood of the occurrence was specifically drawn to the attention of the tenant before the lease was entered into.
QLD
See sections 42-44.
Compensation is payable for disturbances similar to NSW. However, under the Qld Act, the right to compensation from the landlord extends to a tenant holding over, and also to a sublessee or franchisee of the tenant (see definition of lessee).
In addition:
- compensation is payable if the landlord does not rectify any defect in the building (other than a defect reasonably apparent when the tenant enters into the lease or accepts an assignment); and
- Section 43(1)(f) provides compensation for loss or damage suffered by a tenant having to vacate a shop early because of the extension, refurbishment or demolition of the centre.
Compensation is not payable to the tenant for loss or damage suffered due to the landlord taking action as a reasonable response to an emergency or in compliance with a duty imposed under an Act (section 43AB).
See also comments below in relation to relocation (see section 46G) and demolition (see section 46K), where compensation payable by a landlord may be limited in accordance with those sections.
Section 43AD confirms that the landlord is not liable to pay compensation under section 43(1)(f) to the extent the tenant is otherwise entitled to payment of relocation costs under section 46G or reasonable compensation under section 46K (demolition).
Tenant must give the landlord written notice of loss or damage under section 43(1) as soon as practicable after it is suffered. Failure to do so does not affect the tenant's right to compensation but must be considered when deciding the amount of compensation.
A landlord may, for the period 1 year from the date the lease is entered into, limit a claim for compensation by providing the tenant with a written notice of the anticipated disturbance. See section 44A for details which must be included in the notice.
SA
See section 38. Similar to NSW except that disturbance by the landlord under section 38 is specified as:
- inhibiting access of the tenant to the shop in a substantial manner; or
- taking action that would inhibit or alter, to a substantial extent, the flow of customers to the shop; or
- unreasonably taking action that causes significant disruption of, or has a significant adverse effect on, trading of the tenant in the shop; or
- failing to take all reasonable steps to prevent or put a stop to anything attributable to causes within the landlord's control that causes significant disruption of, or which has a significant adverse effect on, trading of the tenant in the shop; or
- failing to rectify any breakdown of plant or equipment under the landlord's care or maintenance; or
- in the case of a shop within a retail shopping centre – failing to clean, maintain or repair the retail shopping centre (including common areas).
A disclosure statement under section 12 is an appropriate means of specifically drawing the attention of the tenant to the likelihood of the occurrence of the disturbance.
TAS
See section 23(1). Similar to NSW, except that the tenant is not required to request the landlord to rectify the matter before the compensation right applies.
The landlord must compensate the tenant if it acts as stated (equivalent to sections 23(1)(a)-(d) and (g) in the Code).
Additional basis for compensation provided in section 23(1)(e)-(f) and (h)-(k), namely if the landlord:
- “acts in a manner which, in all the circumstances is unconscionable” (section 23(1)(e));
- terminates a lease dishonestly, maliciously, or for a non-genuine purpose (section 23(1)(f));
- fails to take reasonable steps to ensure the premises are kept in good order and repair (section 23(1)(h));
- relocates the tenant’s business (section 23(1)(i));
- fails to take reasonable steps to ensure that any defect in the shopping centre or premises is rectified (section 23(1)(j));
- causes the tenant to vacate before the end of the lease because of extensions/ refurbishment or demolition (section 23(1)(k)).
Similar to NSW: the lease can limit liability for compensation in circumstances referred to in sections 23(1)(a)-(d), and (g) above only if:
- before execution of lease, specific disturbance is brought to tenant’s attention by landlord; and
- the lease contains a specific clause providing a formula for compensation in the event of specific disturbance referred to.
No limitation of liability for compensation in circumstances referred to in sections 23(1)(e)-(f) is permitted.
VIC
See section 54. Similar grounds for compensation to NSW, except that the tenant is not required to request the landlord to rectify the matter before the compensation right applies.
The landlord must maintain in a condition consistent with the condition of the premises when the retail premises lease was entered into:
- the structure of and fixtures in the premises;
- plant and equipment at the premises; and
- appliances, fittings and fixtures provided by the landlord relating to services,
except if:
- the need for repair arises out of misuse by the tenant; or
-
the tenant is entitled or required to remove the item at the end of the lease (see section 52).
Tenants can be required to carry out repairs or maintenance work in respect of an essential safety measure on behalf of the landlord by express agreement in the lease. Landlords should note however that the carrying out of repairs or maintenance work by a tenant does not affect the obligations of the landlord as a building owner under the Building Act 1993 (Vic) (including regulations) – see section 52.
WA
In relation to a retail shop in an RSC, section 14 contains similar compensation rights to the NSW provisions except that:
- the circumstances giving rise to the right to claim compensation are not identical;
- before the right arises the tenant must give the landlord written notice of the matter requiring the landlord to rectify the matter and the landlord does not do so within such time as is reasonably practicable; and
- giving a written statement to the tenant before the lease was entered into which included certain details regarding disturbance does not necessarily prevent or limit a claim (depending on all of the circumstances).
Definitions and currency