Put in repair obligations not contrary to s.52 of the Retail Leases Act 2003

In Retail Leases Victoria (Croft and Hay, LexisNexis) expressed the view (at para [70,005]) that a repair obligation imposed on a tenant that went beyond the obligation imposed on a landlord under s.52 of the Retail Leases Act 2003 would not be void under s.94 on the basis that it was contrary to or inconsistent with s.52.

The authors suggest that a provision in a lease that imposed a “put in repair” obligation on the tenant and which obliged it not to pick up the landlord’s “keep in repair” obligation under s.52, but rather, to place the premises, plant and equipment and fixtures and fittings in a higher standard of repair than they were in “when the retail lease was entered into” would be effective. Croft and Hay state (at para [70,005]) that a repair covenant that required the tenant to make up the “gap” between the fruits of a landlord’s “keep in repair” covenant and a “put in repair” covenant” might be effective provided the lease provisions clearly established a capital works obligation on a tenant at its expense for the purposes of s.41(2). In the authors’ view there appeared to be no reason why the landlord could not enforce this obligation and, if necessary, recover the cost of the tenant’s repair obligations as an “outgoing” (as defined in s 3) under s 39 . Croft and Hay’s views were adopted by VCAT in Computer & Parts Land Pty Ltd v Aust-China Yan Tai Pty Ltd [2010] VCAT 2054 (at para [199] to [205]; see in particular para [203]) in deciding that a clause in a lease which required the tenant to contribute $3300 towards the cost of an air-conditioning system was a “put in repair” obligation with the consequence that the tenant had to reimburse the landlord for that cost.