Non Recoverability of Essential Safety Measures Maintenance Costs
There have been significant recent developments in relation to the ability for Landlords to recover Essential Safety Measures maintenance costs from commercial tenants, including items as air conditioning maintenance amongst other things.
A recent VCAT Advisory Opinion has been issued in relation to this issue, as referred to in this Media Release from the Small Business Commissioner.
A review of the VCAT Advisory Opinion, together with subsequent legal interpretation generally concludes that the cost of Essential Safety Measures maintenance cannot be recovered from Tenants whose Lease is governed by the Retail Leases Act and in all likelihood also cannot be recovered from Tenants whose Lease is not governed by the Retail Leases Act.
This also raises the issue of the potential for the recovery by Tenants of Essential Safety Measures maintenance costs that have previously been paid, subject to the statute of limitations.
The Victorian Building Authority Essential Safety Measures fact sheet, includes a list of essential safety measures, which include, however are not limited to, such things as air conditioning, emergency and exit lighting and fire services.
Whilst the possibility does exist for further legal challenges or legislative amendments, we consider it prudent to suspend the recovery of these costs from Tenants and duly consider the potential for Tenants to claim maintenance costs previously paid or reimbursed by them.
We have a detailed understanding of this evolving issue and should you have any further queries, please do not hesitate to contact Paul Farrelly, Paul Sutherland or Grant Sutherland.