Australia: Legal implications of the floods for landlords and tenants

News & Publications
Last Updated: 1 February 2011
Article by Chris O'Shea

As the rebuilding commences following the devastation of the Queensland floods, landlords and tenants of flood-affected properties need to consider carefully their respective rights and obligations under the leases of those properties.

Damage or destruction clause

Damage or destruction clauses are stated expressly in most commercial leases. These provisions deal with the rights of the landlord and tenant where the building or premises are damaged or destroyed and the tenant is unable to use or have access to the premises.

The wording of the clause will identify the nature and extent of the damage required for the clause to apply. There are two main circumstances in which the clause is likely to apply:

  1. Damage to the premises so its use is substantially reduced.
  2. The premises are not damaged but access to the premises is affected, making the premises either partially or wholly inaccessible.

While most clauses will identify both these circumstances, some may only apply when there is actual damage to the premises.


Whilst it is uncommon for the landlord to be required to pay compensation to the tenant, the successful application of the damage or destruction clause will generally attach other specific rights for tenants and landlords:

  1. Abatement of rent and other expenses: The tenant is not obliged to pay rent during the period from when the damage or destruction occurs until the premises may be used or accessed again. The extent of the abatement allowed is usually proportionate to the extent of the damage or destruction, which achieves a more reasonable application. The abatement of other expenses, such as outgoings, for the same period of time depends on the terms of the lease.
  2. Right for landlord or tenant to terminate the lease: The terms of the clause outline the landlord's and tenant's right to terminate due to the damage or destruction. The landlord's right to terminate, rather than restore the premises, is usually limited to where there is a substantial loss of use of the premises and there is normally a period of time for the landlord to make the election to restore the premises before termination is permitted.

Disentitling circumstances

Under the clause, the tenant may be disentitled from abatement if the loss or damage to the premises was caused or contributed to by the act or omission of the tenant or its employees (such as negligence).

Service of notice

Landlords and tenants need to be aware of any procedural requirements to bring these rights into effect. In the event that the rights do not come into effect automatically when the damage or destruction occurs, there will be a specific procedure to follow. For example, the tenant may need to serve notice on the landlord within a certain timeframe and the landlord will need to respond as to whether it will reinstate the premises or access. The procedure will vary from lease to lease.

Mitigate damage

In every case, the landlord and tenant should take all reasonable steps to mitigate the extent of the damage. This increases their chances of obtaining the most beneficial outcome in terms of protection afforded by the lease and the general law.

Construction of the lease clause

In the event that the flood damage sustained does not fall within the express description of damage outlined in the lease, the damage and destruction clause will not apply.  Therefore is it essential for landlords and tenants to be aware of the provisions of their lease.

The Property Law Act

If the damage or destruction clause fails to address the abatement of rent due to flood damage, or a damage or destruction clause is not included in the lease, then section 105 of The Property Law Act 1974 (QLD) may apply, unless its application has otherwise been excluded by the parties to the lease.

If section 105 is applicable, a rent abatement clause is implied into the lease so that rent will be suspended whist the premises are 'unfit for occupation and use' due to flood damage. The rent abatement period extends until the landlord reinstates the premises 'fit for the occupation and use' of the tenant.

Right to quiet enjoyment

Tenants are entitled to possession of the leased premises without any interruption or disturbance by the landlord or any other person lawfully claiming under the landlord. Where the lease does not expressly contain a clause for the right to quiet enjoyment, it is implied into the lease.

A breach of this covenant requires the landlord to have caused the interruption or disturbance. Flood damage, which is clearly beyond the control of the landlord, does not constitute a breach of quiet enjoyment.


When events beyond control of the both the tenant and the landlord make the performance of a lease radically or fundamentally different from what is outlined in the document, the parties may be discharged from their respective obligations due to frustration.

Frustration only applies when the actual damage or destruction does not correspond with that expressed in the damage and destruction clause of the lease. The lease will not be frustrated when the parties have provided expressly for the consequences of flood damage. In such cases, the lease cannot be discharged and is still 'on foot'.

Frustration only applies in exceptional circumstances that were not contemplated by the parties when entering into the lease. The application of the damage and destruction clause is a matter of construction from lease to lease.

© DLA Phillips Fox

DLA Phillips Fox is one of the largest legal firms in Australasia and a member of DLA Piper Group, an alliance of independent legal practices. It is a separate and distinct legal entity. For more information visit

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.