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Who is responsible for repairs on commercial properties?

By Greg Bell

When you own a commercial property, there will occasionally be times when there's a need to do maintenance and repairs to various parts of the building or land around it. No matter whether you have a good relationship with that property's tenant or not, you both need to understand who's responsible for what when it comes to upkeep and repairs. With a clear recognition on both sides, it becomes easier to tackle problems as they arise, or prevent them in the first place.

Generally speaking, there are no hard and fast rules in Australian law about exactly who is responsible for what when it comes to commercial property maintenance or repair. Instead, these terms are typically agreed on a case-by-case basis, and set out in the lease agreement, according to attorney Sara Hatcher of Aitken Lawyers. As the property owner, you will typically be the one preparing the lease, and you would be wise to set out exactly what you will take on as your own responsibility, and what you would expect your tenants to perform themselves (or hire someone to do for them).

You can certainly go back and forth on the details, but once they're codified in the lease agreement, there's little room for argument. As such, you should seek to eliminate grey areas.

A typical agreement

Most often, there's a clear definition for what landlords expect tenants to be responsible for. These include taking care of damage to internal walls, floors, fixtures and so on – if they are damaged in the course of a tenant's business, the responsibility falls on them to deal with them. On the other hand, they would typically expect owners to repair things they cannot easily access on their own, including building systems (that is, electrical, plumbing, wiring for internet connections, etc.) and the structure of the building itself.

LegalVision noted that while there aren't typically laws about what kinds of repairs are whose responsibility, there are legal definitions for what certain terms you will find in a lease agreement include. For instance, if the language of that contract says you, as property owner, are responsible for "structural repairs," that means repairs on "something which has been constructed" – such as a wall or roof. However, a recent case in New South Wales extends that definition to also include fire safety equipment, so it's important to understand the rules of the city or state where your property lies.

What if there's a dispute?

Law Base pointed out that you can typically nip disagreements and similar issues in the bud before the lease is even signed, carefully going through the property to inspect every aspect of it and agree on a case-by-case basis to who will be responsible for repairs in certain situations.

However, it's almost inevitable that over a long enough timeline, you will find yourself getting into an argument with a tenant about who's responsible for a certain repair: You simply cannot write legal language to encompass every possible scenario resulting in damage. As such, you need to have a plan to resolve these disputes. Broadly speaking, that might include bringing in an impartial legal expert to review the situation and lease agreement and then make a final objective decision.

Whether you are just starting to build out your commercial real estate portfolio or you're looking to expand a small empire, the experts at Ray White Surfers Paradise are here to help you. We've closed countless deals and will assist you in finding the best possible commercial property for your needs, so give us a call today to learn more.

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