Cyclone Debbie and Commercial Leasing

Matters for Landlords and Tenants to consider in the aftermath of Cyclone Debbie:-

Rent

Queensland law implies a standard condition in leases that if a premises or part of it is destroyed by flood (without fault of the tenant ) or storm such that the premises is unfit for occupation and use, then the rent or a proportionate part of the rent (determined by the nature and extent of the damage) will not be payable until the premises are rebuilt or made fit for occupation and use by the tenant.  Most leases however contract out of this implied condition and instead incorporate their own terms.

Generally, the express terms in the lease will be similar to the implied condition but may be more favourable to the tenant.  For example, the lease terms may provide for not just rent but also outgoings to cease for the period the premises is unable to be occupied.

We recommend tenants review the terms of their lease in this respect.

Insurance

Tenants in areas which have been affected by Cyclone Debbie, over time may experience loss of profits, for example, as a result of a reduction in the number of customers to the immediately affected areas.

Tenants with insurance will be able to make a claim with their insurer with respect to their losses. The amount and nature of any claim depends on the type of insurance. If a claim can be made it should be made promptly.

Compensation for Retail Shops

Queensland Retail Shop Leases law may also assist tenants in obtaining compensation from their landlords.

The law provides provisions, for example, where the damage is not repaired promptly or the work is done in a way that unreasonably obstructs access to the tenant’s premises.

Tenants will need to show evidence of their loss in order to justify any claim. Examples of evidence would be trading figures for the few years before Cyclone Debbie compared to trading figurers after Cyclone Debbie.

For information on the dispute resolution procedure available by the Queensland Retail Shop laws click the following link:

http://www.qcat.qld.gov.au/__data/assets/pdf_file/0004/101200/guide-to-dispute-resolution.pdf

Should you require more specific advice, please do not hesitate to contact our office and speak with one of our friendly team members.