In brief - Tenant found not liable to pay outgoings under
The Queensland Civil and Administrative Tribunal (QCAT) recently
found that a tenant of a retail lease in Queensland was not
responsible for payment of trade waste charges. The tenant's
entire liability to pay outgoings under the relevant lease was
Landlord attempts to pass trade waste charges on to tenant
The local authority issued an account for trade waste charges in
the amount of $4,116.91 to the landlord. The landlord attempted to
pass on those costs to the tenant. Following the tenant's
failure to pay those charges, the landlord issued the tenant with a
Notice to Remedy Breach.
Tenant not required to pay for rates, cleansing, general or
Clause 4 of the Lease provided that:
the tenant was not required to pay outgoings under the Lease;
in the event of any local or other authority providing any
cleansing or refuse service for the demised premises (whether it be
at the request of the tenant or by direction of any such
authority), the tenant was to pay the costs to the assessing
The landlord's disclosure under the Retail Shop Leases Act 1994 (Qld) confirmed that the
tenant was not required to pay for the landlord's outgoings,
including rates, cleansing, general and water charges.
Was the tenant liable for removal of trade waste from the
The tenant argued that:
The trade waste charges were landlord's outgoings
applicable to the building, rather than the premises; and
The tenant was not required by the Lease to contribute towards
the landlord's outgoings.
The landlord argued that:
Trade waste charges are not outgoings applicable to the
building, but rather charges applied for the removal of trade waste
from the laundromat premises; and
Trade waste charges were a "service" provided for the
sole use of the tenant and therefore the tenant's
responsibility under clause 4 of the Lease.
QCAT strikes out tenant's requirement to pay outgoings
under the lease
The Queensland Civil and Administrative Tribunal held that the
trade waste charges were an outgoing of the landlord and not
payable by the tenant. The landlord's Notice to Remedy Breach
was held to be invalid and the tenant's requirement to pay
outgoings under the Lease was struck out.
Landlords must ensure that outgoings will be covered by agreed
The case highlights the importance of landlords exercising
caution when entering into retail leases under which tenants are
only responsible for payment of direct charges and not for payment
of outgoings relating to the building.
If entering into a retail lease where no outgoings will be
payable, landlords need to consider carefully whether the cost of
outgoings actually incurred by the landlord will be adequately
covered by the rent agreed with the tenant.
If entering into a retail lease where outgoings are potentially
chargeable to a tenant, landlords should err on the side of caution
and comply with the outgoing disclosure and annual reconciliation
requirements set out in the retail leasing legislation.
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