26 March 2021
Retail leases - Obligation to maintain air conditioning
I act for a tenant whose proposed retail lease states that they are responsible for the care and maintenance of the air conditioning unit, including servicing costs.
In Victoria s 52 of the Retail Leases Act 2003 (Vic) prevents landlords from making tenants pay for air conditioning units.
Is there anything under the NSW Act that prevents landlords from making tenants pay for air conditioning servicing costs in NSW?
Thank you for the question.
No, the lessor may require the lessee to maintain and repair the air conditioning unit. There is no restriction in NSW as there is in Victoria and such a requirement is quite common in retail leases.
However, the cost to maintain and operate the air conditioning unit is an outgoing under the lease and the lessor must disclose an estimate of those costs: see paragraph 14.2 of Schedule 2 of the Retail Leases Act 1994 (NSW). If those costs are not disclosed then the lessee is not liable to pay them: see s 12A of the Act.
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