MICKS Marketing Pty Ltd (MM) leased a commercial building from Sub Tropics Commercial Pty Ltd (STC) and after a couple of years, significant cracking appeared in the exterior walls of the building.

MM promptly informed STC about the damage, emphasising the need for maintenance to prevent further issues. However, STC failed to take any action.

The exterior walls continued to degrade, with concrete dislodgement creating a dangerous environment for employees and visitors. The cracks also led to water damage inside the building, creating further disruption and potential health hazards.

Concerned about the safety of their employees, MM took the initiative to engage a consulting engineer to assess the damage.

The engineer’s report confirmed the severity of the situation, revealing movement in a concrete slab and other potentially serious structural issues.

MM provided this report to STC, but the landlord remained unresponsive.

Despite repeated attempts to communicate the urgency of the situation, STC failed to address the issues.

With the landlord’s continued inaction and the unsafe conditions persisting, MM was left with no choice but to vacate the premises.

Citing STC’s failure to maintain the property and the impact on their quiet enjoyment of the space, MM ceased rent payments.

STC subsequently took MM to Court, claiming that MM had repudiated the lease by vacating the premises and stopping rent payments.

STC sought to recover the remaining money owed for the remainder of the term of the lease.

The Court reasoned that STC had a positive obligation to maintain the structural integrity of the building and that their inaction, particularly in light of having received the expert report, demonstrated an intention to no longer be bound by the lease.

By neglecting their responsibility to maintain the property, STC had fundamentally breached the terms of the lease agreement, justifying MM’s decision to vacate and cease payments.

Thank you to Anthony Fogarty for his assistance with this column. Email Manny Wood, principal solicitor at TB Law at manny@tblaw.net.au or call him on (02) 66 487 487.

This fictional column is not legal advice.

By Manny WOOD, Solicitor