Landlords and tenants should be aware that a recent advisory opinion from the President of VCAT sets out certain rights for tenants and imposes limitations on costs of maintenance, and essential safety measures that a landlord can recover from tenants, particularly in relation to retail premises leases. This recent opinion and its implications appear to be a win for tenant. Managing Director Joey Tran consider the implications.

Key Points

• In VCAT’s opinion, a landlord cannot recover as an outgoing from a tenant costs incurred in complying with s52 of the Retail Leases Act 2003 or s251 of the Building Act
• In VCAT’s opinion, tenants may have a defence claim and ‘claw back’ payments made to landlords that are in relation to s52 and s251 (subject to statute limitations).
• Landlords should be wary of this recent update and understand their obligations under the law. Landlords facing claims should keep in mind that this principle will need to be tested over time. Considerations should be given to situations concerning whether a benefit (such as discounted rent) has been provided to a tenant in lieu of payments made, whether a landlord’s circumstances have materially changed in reliance of payments, among others.
• Managing agents should seek advice as to how to appropriately advise their clients as well as understanding the implications of the President’s decision.

For further information, please contact JT Lawyers.