Who should pay the costs of essential safety measures compliance and repairs and maintenance under a lease? Determination to be made by the President of VCAT
By Evelyn Marcou, Senior Associate, MST Lawyers
A long debated issue in the retail and commercial leasing area has been whether the Building Act 1993 (Vic) (“BA”) prevents a landlord from recovering from its tenant as an outgoing under the lease the cost of essential safety measures or other steps required to comply with the BA.
A related issue is whether a landlord can recover the costs of repair and maintenance as an outgoing under section 52 of the Retail Leases Act 2003 (“RLA”).
The Small Business Commissioner has made an application for advice from the President of VCAT about the operation of section 251 of the Building Act 1993 (Vic) and section 52 of the Retail Leases Act 2003. The issues in the application are:
- The responsibilities of a landlord or tenant under a commercial lease concerning compliance with essential safety measures requirements under the Building Act 1993 and Building Regulations 1993; and
- Who should pay for the costs of essential safety measures compliance under the Building Act 1993; and
- Who should pay for the costs of repairs and maintenance obligations under the RLA.
This is the first time the Commissioner has used his new advisory power under the Small Business Commission Act 2003 (Vic) to seek an advisory opinion.
At a recent direction hearing, the President made an order for oral argument to be heard on 5th and 6th of February 2015. I will Provide an update on the issue as it develops.